Storage Technologies Vie for Dominance

The jury is still out on iSCSI replacing Fibre Channel in the enterprise storage area network market, but the situation will get more interesting within the next few years for FC versus Fibre Channel over Ethernet.

That's according to Dell'Oro Group analyst Seamus Crehan, who tells Channel Insider that the FC-SAN market experienced broad-based record sequential revenue growth in the fourth quarter, with both the switch and host bus adapter segments posting large increases.

The big four vendors—Brocade, Cisco Systems, Emulex and QLogic—all showed strength, with the overall market jumping more than 15 percent quarter over quarter.

A new study from Dell'Oro Group shows that fourth-quarter results were strong enough to put revenues close to on par with the record results seen in late 2008, and propel port shipments above those levels.

Crehan credits the results to a confluence of improving economic conditions, overzealous budget cuts during the first half of 2009, government stimulus and some alleviated supply constraints. He adds that the server upgrade cycle that started in the second quarter of 2009 was also a key driver of FC HBA growth, especially in the 8G-bps segment.

IDC reported that external disk storage systems factory revenues for the fourth quarter of 2009 showed a slight year-over-year decline of 0.7 percent, to $5.3 billion, but the total disk storage systems market grew 0.2 percent to $7.3 billion. While Open Networked Storage—NAS (network-attached storage) combined with Open/iSCSI SAN—was up 3.6 percent year over year, the iSCSI SAN market exploded, with 40.6 percent revenue growth year over year.

Crehan says iSCSI is succeeding primarily in the small and midsize business market, with limited penetration in the enterprise market.

"Fibre Channel is in more larger enterprises where we're looking at mission-critical applications," he says.

Crehan says he expects FC to continue to grow until at least 2012, at which point FCOE might have expanded beyond its current small installed base. "It takes a few years before that can gain a significant foothold in the market and start to eat into Fibre Channel growth," he adds.

He believes FC and FCOE will be competitors for some time, but it remains to be seen whether iSCSI will move up the food chain too. Most FC vendors already have significant plays in FCOE, he says. "As always, it comes down to who executes better."