From one angle, the contrast between enterprise storage requirements and those of small and medium-sized businesses (SMBs) could hardly be greater. Enterprise IT demands capacity, scalability, flexibility and performance, while the typical small business would trade a good part of these qualities for affordability and low maintenance.
But from the perspective of problems to solve, there's a lot of common ground. As in the enterprise, SMBs must grapple with data protection, archiving, security and availability issues, all under the burden of rapidly growing data.
SMB storage poses a challenge, both to the SMB and to storage vendors. For the SMB, the challenge is to effectively apply technology, invented for the enterprise, that often assumes nearly unlimited financial and IT staffing resources. For storage vendors that want a piece of this large and fast-growing market, the challenge is to build and package solutions with lower cost and simpler management, and to find a way to deliver these solutions to a broad array of customers.
Expansion into SMB territory reflects the opportunity seen by large storage vendors in a market where increasing requirements have trumped simpler technologies. But it is also a matter of basic economics. "EMC has enjoyed an enviable record of growth, year after year," says Larry Zulch, vice president and general manager of EMC's new Insignia SMB program. "Maintaining that level of growth requires moving into adjacent markets."
NAS Tops SANs in SMB Space
The first step toward solving storage problems is consolidation. Most SMBs appear to have taken that first step, at least as far as turning from isolated servers with direct-attached storage (DAS) to NAS.
A recent Yankee Group survey found that 56 percent of companies with 250 to 499 employees deployed NAS storage. The numbers are slightly lower for smaller companies, but even for companies with fewer than 100 employees, NAS still had more than 40 percent penetration.
The same survey found that SAN has less traction among smaller companies. Yankee Group found that 20 percent of companies in the 250 to 499 range made use of IP SANs, and only 13 percent of these companies ran Fibre Channel SANs.
The greater complexity of SAN and the availability of very low-cost NAS appear to make NAS the current deployment of choice among SMBs.
"NAS has really proliferated," says Gary Chen, small and medium business strategies analyst for Yankee Group. Chen cautions that for the smallest companies, NAS storage may mean little more than a single disk in a box with an Ethernet connection. "NAS can be a very low-end product now," says Chen. "A lot of NAS in [the smallest companies] is going to be retail, consumer stuff."
Different Needs for Different Business
One difficulty in trying to describe the SMB storage picture is the broad inclusiveness of the SMB label, covering companies of widely varying size and IT sophistication. EMC says its Insignia line is designed to reach companies from 20 to 200 employees; Hitachi Data Systems targets SMB customers in the 100 to 400 employee range. Although some of these businesses may make use of high-end storage technology, many may be just beginning to address basic requirements.
"Backup is still the main issue with storage for SMBs," says Chen. "That affects the majority of SMBs." Many, he says, "don't have any backup at all, or the backup is not robust enough."
Karen Sigman, vice president of worldwide channels for Hitachi Data Systems, sees a similar picture. "The first problems are archive and consolidation," says Sigman. "They're still a long way from addressing those problems in this space."
However, Sigman also points out that data availability is a growing concern for smaller companies that have become increasingly aware of the critical need for uninterrupted access to company data.
Breece Hill is a storage company that targets SMB customers. Pat Blakey, Breece Hill's director of marketing, sees developments beyond the initial phase of reliable backups.
"Before, it was just simple backup and recovery," says Blakey. "Now they're looking at it from a standpoint of, 'How can we manage data based on the time value of it?'"
Tony Lock, chief analyst at Bloor Research, doesn't necessarily see a direct correlation between company size and storage sophistication. "There are some very small organizations that are beginning to use network storage more effectively, beginning to use storage virtualization very effectively, and some of the more sophisticated software management tools," says Lock.
Regulatory compliance is often cited as a driver for archiving at the enterprise level, but compliance appears to have a more moderate affect on smaller organizations. This may be because smaller companies are more likely to be privately-held, and, outside of certain industries, privately-held companies are subject to fewer regulations.
Sigman says there is growing recognition of compliance issues among SMBs, noting that compliance has made SMBs "more rigorous" in their approach to data retention.
But Chris Stone, Breece Hill's vice president of sales and marketing, believes compliance concerns are still growing. "I think we'll see, the end of this year, going into next year, more interest at the SMB level in compliance," says Stone. "It's not there yet."
Making Storage Fit the SMB
For the vast majority of SMBs, lacking storage specialists, easier deployment and lower ongoing maintenance are critical concerns. Making solutions more accessible to these organizations often revolves around packaging together different pieces to reduce on-site involvement.
"It's all about packaging it for this market space," says Sigman. "It's taking all the elements that typically are customized and put together by highly trained engineers and putting it in a simple box with simple instructions just like you would have with a PC."
"At the enterprise level, they can buy several boxes and make it work," says Blakey. Breece Hill sells a D2D2T (disk to disk to tape) appliance that sidesteps the need to make multiple products work together. Stone points out that a single warranty and a single service contract are other advantages to an appliance approach.
EMC's Insignia line represents a different sort of packaging, a packaging of the company's SMB storage offerings into a limited portfolio with relatively few items. Customers can choose from among a few SMB-focused configurations, rather than wading through all of the company's hardware and software storage offerings and the myriad of ways they can be put together. This is an important development, says Chen.
"A lot of it is making it easy for SMBs to understand what all of the pieces do," says Chen. Chen goes further, saying EMC's approach with Insignia "demonstrates what storage has to be for the SMB market."
Zulch says his company's approach is one of tailoring solutions for the SMB market. "We can't just take enterprise products, dumb 'em down, and be successful," says Zulch. "They have to be easy to use and to install, but they also have to be highly capable."
Ironically, according to Zulch, making complicated storage products easy to use requires more, not less, advanced design. "SMB requires the most sophisticated products in the portfolio," he says.
The Big Names
Both EMC and HDS made significant moves in the SMB market last month, EMC rolling out Insignia, and HDS introducing plug-and-play SAN kits compatible with Microsoft's Simple SAN initiative. IBM, HP, Network Appliance, EMS and HDS are five big-name storage vendors actively courting the SMB market.
Lock sees these developments as part of an increasingly effective approach to SMBs by enterprise storage vendors. "The large storage vendors have begun to take the market sector very seriously indeed," says Lock, "and have begun to tailor their solutions to fit the market. Until recently, they haven't really had suitable offerings."
The bigger challenge may be in reaching SMB customers; the sheer number and diversity of SMBs makes a direct sales approach impossible. Worth noting, both EMC and HDS made channel-related announcements as part of their SMB product unveilings.
"You can't reach this market without channel, that's the fact that most of these organizations find hardest to deal with," says Lock. Lock notes that the development of a distribution channel and SMB marketing on the part of the large storage vendors is "evolving."
"And by evolving," he adds, "I mean in the true Darwinian sense of the word, that they're trying lots of different things, some of which work, and a lot of which don't."
Sigman acknowledges that SMB and enterprise segments require different approaches. "It's really easy to make the mistake of trying to apply your enterprise processes to this market." The difference, she says, is that "there's a lot more custom in the upper-end space than in the lower-end space. You've got to package it better, you've got to simplify the user experience."
Other big-name IT vendors also have their sights set on the SMB market. There's Dell, of course, long familiar to SMB hardware customers and a longtime EMC partner. Then there's Microsoft, which has rolled more and more storage capability into its Windows Server 2003 operating system, effectively bringing some high-end storage capabilities into the mainstream. Microsoft's participation "brings storage to the attention of the SMB in a way that the other vendors hadn't previously had success," says Lock.
It's clear that vendors have gotten better at addressing the requirements of SMB customers, and that SMB customers have grown more sophisticated in their use of storage technology. What's needed to progress into more advanced technologies, such as virtual tape (VTL) and encryption, says Lock, is a more educated SMB market.
"These are areas where the market as a whole really needs to learn what it should do, and then get hold of some best practices on how to do it," he says. "That's where the storage vendors should really be trying to help their customers."
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