SUNW is in the sweet spot to deliver their storage solutions.... a 101% expected ANNUAL GROWTH RATE!
InformationWeek (10/05/00, 5:41 p.m. ET)
(http://www.techweb.com/wire/story/TWB20001005S0010)
Web Boom Puts Data Storage In Demand
By Martin J. Garvey, Paul McDougall, and Teri Robinson ,
Since Worldwide Financial Services took its traditional bricks-and-mortar mortgage business to the Web last November, its revenue hasn't increased significantly, but data volume has, said chief information officer Pat Hinman.
Hinman said the $25 million Southfield, Mich., company, now known as Loangiant.com, has seen data volume increase by 60 percent.
And Loangiant.com isn't alone in trying to manage a burgeoning data load. Many companies are being inundated with data from both the Web and traditional sources.
One barometer of that data deluge is the increasing demand for storage, the hardware and software components that hold all those significant bits and bytes. According to a survey just released by InformationWeek Research, more than half of businesses estimate their storage capacity is growing between 25 percent and 50 percent annually. Five percent put annual growth at a dizzying 101 percent or more.
The increasing dependence on storage systems led InformationWeek Research to ask IT executives to evaluate their storage vendors, a group growing in impact and importance to enterprise IT architectures, if only because of the huge expenditures involved. Almost half of the 385 respondents to the survey, conducted last month, spend more than $200,000 annually on storage solutions; for 15 percent, spending has reached the $1 million mark; for six percent, more than $5 million. As a percentage, large companies spend the most, with 41 percent popping a cool million on storage solutions each year.
InformationWeek Research asked IT professionals to rate nine storage vendors - Compaq Computer Corp. (stock: CPQ), Dell Computer Corp. (stock: DELL), EMC Corp. (stock: EMC), Hewlett-Packard Co. (stock: HWP), IBM Corp. (stock: IBM), Network Appliance Corp. (stock: NTAP), Seagate Technology Inc. (stock: SEG), Storage Technology Corp. (stock: STK), and Sun Microsystems Inc. (stock: SUNW) -- in a variety of product and service categories. In overall customer satisfaction, respondents ranked EMC highest, but Compaq, Dell, and IBM were close behind. Compaq ranked at the top in overall product value, and IBM in global expertise. Dell tied with EMC in after-sale service.
That may help explain why Loangiant.com chose a SAN from Dell, which is also Loangiant's server vendor.
"It seemed like the safest place for the data," Hinman said.
At Dell's request, Loangiant.com IT officials visited the computer maker's Application Service Center prior to its November launch to check out a SAN scheme customized to Loangiant.com's specifications. A relative newcomer to the market, Dell staked a claim to nonproprietary enterprise storage with its purchase of ConvergeNet Technologies Inc. last year.
"Everything worked beyond our expectations," said Hinman, who readily decided to go with Dell's offerings.
Loangiant.com has since purchased two Dell 650 F systems, which house command modules for the system, each with an attached 630 F unit for additional drive space. At least for now, Loangiant.com has a firmer grip on its data storage -- and to Hinman, that's worth every penny of the $900,000 spent on the storage system, half on the SAN, the rest on Microsoft SQL Server and other Microsoft software.
In many ways, Loangiant.com typifies companies with exploding e-commerce traffic. By opening their businesses to the Web, these companies have also opened the data floodgates. Loangiant.com, which has 150 employees, converts about 10 percent of the leads it gets over the Internet into loans, each of which requires 600 data fields per completed form.
And, as Hinman found, data begets data.
The data coming in is being stored and analyzed, which generates even more data, he said. Indeed, survey respondents cite the increase in customer data as the biggest driver behind their storage purchases.
Along with other companies, Loangiant.com is helping drive the storage industry boom that last year represented $13.5 billion in sales, a 35 percent increase from the year before, according to Dataquest Inc., San Jose, Calif. The market-researcher expects storage sales to top $17.4 billion this year. And heavy demand is likely to continue, considering a Meta Group prediction that by 2004, companies will have to manage 10 times as much data as they do today.
All that adds up to a greater dependence on storage technology as a critical IT element and on storage vendors as technology partners.
What makes a good storage vendor? In the InformationWeek Research survey, IT managers rated reliability (92 percent), performance (86 percent), scalability (76 percent), and low cost (74 percent) as top priorities. Least important are delivery, best-of-breed technology, customized systems, and customer referrals.
Enter EMC. Among survey respondents, EMC, Hopkinton, Mass., was rated the highest in five categories: product reliability, service-level guarantees, product innovation, interoperability, and service. It didn't rank as well in ease of administration or strategic understanding.
With $9 billion in sales, 30 percent of the RAID storage market, and a decade-long track record that's built loyalty among a sizable population of the world's largest companies, EMC is clearly thought a leader in the storage arena. One reason is its sharp focus: EMC only does storage, unlike competitors such as HP, IBM, or Sun. Beyond that, EMC works hard to ensure its reliability, support, and service are the platinum standard; it has more than 4,000 employees in the service area alone -- and that number will increase, company executives say.
Verisign Global Registry Service, formerly Network Solutions, has experienced that effort firsthand.
"We're a Sun shop, but Sun's storage just wasn't cutting it," said Aristotle Balogh, vice president of engineering at the Herndon, Va., company, which registers all .com, .org, and .edu names on the Internet. The URL registration service processes 27 million transactions a day. "We want a storage partner that understands the mission-critical nature of our business. One corrupted record can take a company off the Internet or take a site down."
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SUNW's management MUST get their storage solutions out to their customers. They must be able to deliver "mission-critical" services now. I hope their new systems accomplish this. If so, and the "positive" message is provided to our customers, then there is no stopping SUNW's current growth presently tracking at 35%.
EKS |
