Storage Networking Times
Issue 4, March 2007

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Standards Update: iSCSI -- The Growing Power of IP

Aad Dekkers, SNIA Europe IPSI Chair, IPSI-Europe-Chair@snia.org

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Despite the media hype around the explosion in demand for storage, revenue predictions for the European storage market show only modest potential for growth in 2007 and beyond. The market, with its varied technologies, appears at least on the surface as quite mature. Scratch the surface however, and you will find a considerable amount of changes taking place. Top among these changes is a very strong shift from direct attached storage (DAS) towards networked storage - the combination of storage area networks (SANs) and network attached storage (NAS). And within networked storage, there’s a rising star that is outgrowing all the others: iSCSI SAN.

For those who know me, my enthusiasm for iSCSI technology will hardly come as a surprise. After all, as Chairman of SNIA Europe’s IP storage Initiative (IPSI), it is my mission to drive the adoption of IP-based SAN storage solutions in Europe through evangelism, education and promotion. Even so, I have every reason to be optimistic about the coming year. While iSCSI SAN revenue won’t come close to reaching Fibre Channel (FC) SAN levels yet, 2007 will be marked by a number of interesting developments that will eventually lead to a dramatic change in the revenue split between these two technologies.

iSCSI and IP Storage

For those of you new to the world of IP storage, iSCSI is a protocol for moving block data over TCP/IP networks. It allows companies to set up a SAN using the ubiquitous Ethernet network protocol, forgoing the need for specialised network infrastructure such as Fibre Channel. Because of the widespread adoption of Ethernet and TCP/IP, iSCSI SANs are typically much easier to manage than FC SANs. In addition, iSCSI SAN equipment is considerably cheaper than its FC SAN counterpart.

Together with iFCP (Internet Fibre Channel Protocol), and FCIP (Fibre Channel over IP), iSCSI constitutes what is known as the IP storage market. iFCP and FCIP are bridging technologies that provide the interconnection for Fibre Channel SANs using TCP/IP networks. However, as over 95% of IP storage revenue is derived from iSCSI, most people automatically think of this technology when talking about IP SANs or IP storage.

The Numbers

Currently, iSCSI accounts for a relatively small part of the total storage revenue in Europe. According to preliminary figures from IDC, the Western European storage market (comprising DAS, FC SAN, NAS and iSCSI SAN) was worth $7,429 billion in 2006, of which $77.5 million was derived from iSCSI SANs. However, while the total storage revenue is expected to grow annually by less than 2% on average in the 2005-2010 timeframe, IDC predicts a stunning 69% compound annual growth rate for iSCSI SANs during the same period. This means that by 2010, IDC estimates that iSCSI will account for about 8% of total storage revenue and 15% of SAN revenue in Western Europe, compared to 1% and 3% respectively in 2006.

It is interesting to note that IDC adjusted its figures for the total market upwards compared to its previous forecast in July 2006. Eric Sheppard, programme manager European storage research at IDC, explains in his latest update that demand for networked storage (SAN and NAS) was higher and pricing conditions were more favourable than previously expected. I firmly believe that even this updated forecast is too cautious, particularly when it comes to iSCSI. Allow me to explain why.

SME Moving To Networked Storage

The iSCSI market to date comprises of two distinct segments: tier 2 and 3 (departmental and regional) data centres in large enterprises, and the faster-growing small and medium enterprise (SME) market. Forced by growing business demands for storage and a need for better storage management options, small and mid-sized companies are moving away from DAS in favour of networked storage alternatives. This trend also clearly shows in the IDC figures, with negative compound annual growth rates for both internal and external DAS.

SMEs that are in the market for externally attached storage solutions most often shop within the $5k-$10k and $10k-$25k price bands. While the vast majority of such arrays have historically been directly attached, we are seeing an increasingly larger portion of this market move to networked storage. Since external DAS arrays are block I/O devices, it is reasonable to expect a large portion of this market to utilise block-level networked storage (i.e., SAN). Couple this with the very price-sensitive nature of such environments and one can understand why IDC is expecting such striking iSCSI array growth over the next five years. This should not be surprising when considering that Europe, with its many countries, hosts a relatively large number of SMEs, as well as many regional data centres and local offices of large international companies that have similar needs. Hence, there is a big opportunity for iSCSI suppliers in Europe.

iSCSI On The Radar

Vendors are realising this too; nearly every major player in the storage industry recently acquired or developed iSCSI technology. Of particular interest are Microsoft’s long-standing support for its native iSCSI initiator and its acquisition of the Stringbean iSCSI target technology. Many SMEs are relying on a Microsoft environment, and the software giant is keen on keeping them on board as they move to a networked storage solution.

IBM, HP, NetApp and EMC are also aiming to address Europe's SME markets with their entry level and midrange product families. Interestingly enough, each of these offerings supports both NAS and iSCSI. But these suppliers are not alone. Indeed, several new entrants are challenging the establishment by offering iSCSI solutions that fit well with the pricing I mentioned earlier. According to IDC, companies to watch in this space include EqualLogic, Intransa and LeftHand Networks.

Technology Drivers

The iSCSI market to date has largely been fuelled by the availability of affordable Gigabit Ethernet-connected storage solutions supporting Windows host environments. This market will continue to grow rapidly as it displaces DAS. Further market expansion is now starting to be driven by the availability of complete storage solutions capable of supporting business-critical application environments running on other host platforms (Linux, AIX, Solaris and VMWare).

Another driver of market expansion will be 10 Gigabit Ethernet (10GigE). Thanks to 10GigE iSCSI now offers faster throughput rates than FC SAN and will continue to do so when FC SAN gets to 8Gb/s later next year. While 10GigE equipment still is fairly expensive, it is widely expected that prices will drop quickly when the market uptake accelerates. This will not take very long; a recent poll on Byte and Switch showed that 76% of storage managers have already implemented 10GigE in their infrastructure or are considering to do so. Moreover the arrival of 10GigE will also accelerate the decline of 1GigE equipment prices.

Two other technology drivers are the growing popularity of blade servers and virtualisation software, as both play an important part in the ongoing trend of server and storage consolidation. Blade servers, the low-cost modular alternatives to legacy stand-alone servers, don’t have internal storage and, as such, have to rely on networked storage. Meanwhile, server virtualisation software makes it much easier to share and pool storage resources, thereby providing a fertile breeding ground for networked storage.

Summary

With more than 25,000 iSCSI SANs deployed worldwide, we are now seeing widespread adoption. In addition, several forces are pushing iSCSI into the mainstream market. 2007 will see iSCSI making strong inroads into the SME market in particular, replacing internal and external DAS during storage consolidation efforts. At the same time, iSCSI continues to gain credibility in tier 2 and tier 3 data centres in large enterprises. As the technology further matures and prices of 10GigE become an 'affordable' link between server and storage, those with a stake in the market should expect iSCSI to surface first as an addition to FC SAN, then as an alternative.

In a way, it is a no-brainer. Any technology that is open, affordable and easy to use will eventually win from proprietary, expensive competition, even if the latter has dominated the market for years. It may take some time, but it is inevitable. We saw it with Ethernet versus Frame Relay and Token Ring. We are seeing it with Linux versus Unix. Soon, we will see iSCSI taking on traditional, monolithic storage systems – and beating them, one by one.

To learn more about the SNIA Europe IP storage Initiative, visit www.snia-europe.org/ipstorage