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Storage Commoditisation

June 9th, 2004 · No Comments

News.com writes that Intel may be eyeing the storage “white box” market:

Intel is working with a partner to integrate some storage functions with processor chips, which could speed up performance and cut costs.

Such a move, over time, could have a significant impact on the industry. Smaller PC and server makers could start to sell their own storage systems by using the fundamental engineering and design work performed by Intel. Conversely, large storage companies such as EMC could feel a pinch in their plans to target small and midsize businesses.

Data storage equipment can reside within server and PC computers as well as in separate boxes full of disk drives, known as disk arrays.

Both internal and external storage systems frequently are set up using redundant array of independent disk, or RAID, technology, which allows data to be preserved even if a drive fails. Historically, storage heavyweights EMC, Hewlett-Packard, IBM and Hitachi have focused much of their attention on making high-end external arrays. These products, such as EMC’s Symmetrix, connect to multiple servers for more efficient use of storage resources and improved management. But the machines, which can hold scores of terabytes and include sophisticated data-copying features, can cost hundreds of thousands of dollars.

Storage manufacturers have been paying more attention to the lower end of the market lately. Dell, which has a partnership with EMC to make and sell arrays, recently introduced a networked storage system that can hold up to 3 terabytes and has a starting price of about $5,000. Samsung, which also has a partnership with EMC, is aiming to sell storage equipment to small and midsize businesses in Korea.

John McArthur, analyst at IDC, thinks there is a considerable market for white box makers focused on bare-bones storage arrays, especially outside the United States, in places like China. “There’s a lot of units in that low-end storage space,” he said. “It is not unreasonable to expect Intel to try to increase their presence in the white box market.”

Aside from businesses, homes also are seen as a possible new and vast market for data storage products. With consumers storing more and more audio and video files, computer makers have begun selling equipment to hold and manage the data.

Another factor that may pave the way for an Intel-led charge toward cheaper storage boxes is that a number of storage technologies are becoming commoditized, said David Freund, an analyst with researcher Illuminata. Disk drives are one example, he said. He also pointed to a relatively new disk drive interface, Serial ATA. This is a higher-performance upgrade to the ATA interface common to desktop computer disk drives, and in most cases offers a cheaper alternative to drives using the higher-end SCSI interface, Freund said.

Freund doesn’t expect Intel itself to go so far as to assemble storage white boxes, but to work with partners, such as Asia-based manufacturers. He suggests Intel could provide chips with integrated storage functions, storage motherboard products and “increasingly complete reference models, including third-party software components.”

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