High-end storage vendors, after a long period of stasis, are once again delivering innovation in their high-end storage systems in the form of thin provisioning, enhanced replication facilities, redundant array of independent disks (RAID) 6, internal serial advanced technology attachment (SATA) disk support, more host connectivity options, and different channel and pricing strategies. Nonetheless, the impact of this innovation on market share changes will be slow to manifest itself for many reasons, including end-user reluctance to change storage vendors, vendor sales channel limitations and professional service constraints.

End users considering a high-end enterprise disk array purchase are still encouraged to include nonproduct criteria in the selection process, as well as hardware specifications and array functionality. These nonproduct criteria include:

• Pre-sales support
• Service and support
• Break/fix responsiveness
• Independent software vendor support
• Acquisition and upgrade pricing
• The impact of changing storage vendors on procedures, automation and scripts, storage management tools and training

Where the costs and risks of changing storage vendors are acceptable, users are encouraged to look at the end of a product life cycle or useful product service life as a negotiation opportunity to solicit bids from at least three providers and to seriously consider the input of nonincumbents.

Vendors no longer retire storage systems in the traditional sense. Instead, they gradually shift their marketing emphasis to their newly announced systems as production of their older systems ramp down and production of their new systems ramp up. During this transition phase, the introduction of new functionality is generally held to a minimum. The duration of this transition phase will vary depending on the vendor's inventory on hand and its agility in switching manufacturing capacity.

The high-end enterprise disk array market is a mature market segment that, while still large, is no longer a growth market. Rather, the number of units sold continues to decline, down 15.2% from 2002 to 2006. This creates a highly competitive climate where every sale is an important one. The average raw configuration for a high-end enterprise disk array in 2006 was 27.4TBs. With an average end-user selling price (hardware only) of $444,243 or $16.22 per gigabyte in 2006, every bid won impacts the vendor's bottom line. The result is a battle for every sale, which creates a high barrier to entry for this market segment.

The MarketScope for High-End Enterprise Disk Arrays, 2007 uses the same six evaluation criteria as in 2006:

• Marketing strategy (completeness of vision)
• Product strategy (completeness of vision)
• Product or service (ability to execute)
• Sales execution and pricing (ability to execute)
• Market responsiveness and track record (ability to execute)
• Customer experience (ability to execute)

Gartner defines high-end enterprise disk arrays as external controller-based RAID that:

• Use a multiple controller architecture
• Support mainframe and open-system environments
• Support Fibre Channel Connection (FICON), Enterprise Systems Connection (ESCON) or Fibre Channel (FC) host connectivity
• Support the z/OS operating system or other proprietary mainframe operating systems

Providers are selected for inclusion in the MarketScope based on a variety of vendor-independent criteria, with final determination made by the authors with input from the global Gartner storage analyst community. Factors that contribute to a provider's inclusion on or exclusion from this MarketScope include:

• Products meet Gartner's baseline definition for high-end enterprise disk arrays
• Global presence
• Market share and revenue data (a measure of vendor penetration into the market)
• Client inquiry activity (reflecting Gartner clients' interest in the vendor and its products)
• Ability to deliver new or interesting technology (demonstrating an understanding of and innovative approach to market needs)

Because the HP XP24000/XP12000/XP10000 products are offered through an OEM agreement from Hitachi, and the Sun StorageTek 9990V/9990/9985 models are co-branded with HDS, the definition of product ownership needs to be clarified. For the purpose of this MarketScope, a product belongs to a technology provider if it carries the provider's company logo, is on the provider's price list and the provider offers first-level maintenance support.

This MarketScope includes the following providers (in alphabetical order):

• EMC — Symmetrix DMX-4, DMX-3, DMX-2 and DMX800
• Fujitsu — Eternus8000 and Eternus6000
• Hitachi/HDS — Universal Storage Platform (USP) V, USP and Network Storage Controller (NSC) 55
• HP — StorageWorks XP24000, XP12000 and XP10000
• IBM — System Storage DS8000 and DS6800 series
• Sun — Sun StorageTek 9990V, 9990 and 9985

Vendors not evaluated in this MarketScope that offer products that fall under Gartner's definition of a high-end enterprise disk array include NEC (iStorage) and Nippon Unisys (Sanarena).

Overall Market Rating: Positive

Although the high-end enterprise disk array market is mature, modest growth in revenue has occurred despite unit shipment decline, small annual shifts in market share and high barriers to entry. This is due, in part, to recent innovation that focuses on encouraging consolidation and lowering management costs, which are major components of storage total cost of ownership (TCO).

The majority of the vendors in our evaluation support or have announced plans to support the technologies that Gartner considers the next "must have" functionality for the high-end enterprise disk array market. These include thin provisioning (because of its ability to dramatically improve use rates and save costs for end-users by delaying the purchase of additional drives and potentially reducing administration costs); and tiered storage supported by SATA disk and high-capacity, low-cost FC drives (for TCO reduction). All the vendors in our evaluation are financially viable and offer products that scale beyond the requirements of most users.

EMC has been successful to date in shifting from a hardware-focused company to an infrastructure-focused company, while simultaneously maintaining its position as the high-end enterprise disk array market leader, with a 39.5% revenue market share in 2006. Its DMX-4 product, which started shipping in late August 2007, represents a midlife "kicker" to the successful DMX-3 that includes a new disk enclosure that will support intermixing FC and SATA disk drives by year-end 2007. The DMX-3 installed base can also benefit from microcode-driven performance enhancements by upgrading to the latest version of Enginuity. DMX-3 and DMX-4 also support secure data erasure capabilities, enabling users to erase a disk after it has been marked as faulty, as well as several other security features that are distinct, but not unique, in the market.

Although these feature enhancements hold potential promise, EMC remains behind the competition in terms of delivering feature functionality, which Gartner considers to be important in this segment. Even though support for a thin-provisioning implementation was announced for the DMX-4, it is not expected until the 1Q08 time frame, leaving EMC behind the technology curve relative to some of its competitors. There is little doubt that EMC's superior sales and marketing execution will weather this technology lag and help EMC maintain its present revenue share leadership position. Balancing technology innovation against nonproduct attributes, EMC retains a Positive rating.

Rating: Positive

Fujitsu retains its promising rating on the basis of its distinct product features — encryption and massive arrays of inactive disks (MAID) — its ability to meet stated delivery goals for feature enhancements and an improvement in the rate of revenue loss over previous years, although its position within the category has declined. The Eternus8000 is currently unique in the market in its support for encryption. It also supports MAID as a way of addressing power and cooling concerns. Fujitsu has added support on the Eternus8000 and Eternus6000 for network-attached storage (NAS) connectivity via a partnership with NetApp for its V-Series. However, although the technology is solid and competitive, it is not compelling. For example, such transformational technologies as thin provisioning are not on the stated road map.

Fujitsu entered the global high-end disk array market in 2006 with full distribution of its high-end Eternus product in the U.S., Canada, Japan and the Asia/Pacific region after selling it in only Japan for two years, and with limited distribution in the U.S. and Canada in 2005. Fujitsu's year-end 2006 market position remained a distant sixth based on revenue market share. Despite the positive trend in the rate of revenue loss — Fujitsu moved from a 36% decline year over year (2004 to 2005) to a 13% decline year over year (2005 to 2006) — the change is not sufficient to improve the company's MarketScope rating. The installed base for the Eternus6000 stood at just over 1,400 worldwide as of January 2007. For the Eternus8000, 365 arrays are installed worldwide, with the U.S. installed base estimated in the single digits. Fujitsu must improve its marketing, improve its go-to-market sales strategies and increase its number of field sales specialists to succeed in any meaningful way with its entrance into the mature high-end enterprise disk array market.

Rating: Promising

For the year ending December 2006, Hitachi/HDS had the largest revenue gain in the high-end enterprise disk array market of any vendor that Gartner tracks, with a 30.1% year-over-year increase. Although it still landed in third place, it gained 3.2 points of market share. Given that these figures do not include the sales made to or by Hitachi/HDS' partners (HP and Sun), the growth in revenue market share is all the more impressive. The USP V product introduction (May 2007 announcement; July 2007 general availability) included a thin-provisioning implementation as well as capacity, connectivity and performance enhancements compared with the previous-generation USP product. Although the USP V does not support SATA disks for in-platform tiering, it does support them behind the array in an external, virtualized pool. Extending thin provisioning to include the externally attached arrays is the next step in increasing storage use and end-user cost savings, and Hitachi/HDS has announced plans to release this capability, as well as internal SATA drive support, by YE07.

Hitachi/HDS made some changes in the structure of its sales organization in 2006, which have been proven to have merit. Additionally, the company has altered its pricing strategy for 2007 by reducing its list prices, which may have the net effect of decreasing the length of the sales cycle. The company still shows reluctance to compete on price, but is arguably making strides toward increased sales. Additional work in the areas of sales and marketing should help the company continue this trend. Although Hitachi/HDS retains its Positive rating, its relative position within the positive category has improved.

Rating: Positive

HP goes to market in the high-end with StorageWorks XP24000 and XP12000, thus benefiting from its OEM relationship with Hitachi in terms of product vision and product execution. The XP24000 (available since July 2007) has a strong feature set that includes capacity, connectivity and performance enhancements over the previous generation — XP12000 — and a thin-provisioning implementation for internal storage. The XP24000 supports SATA disk drives externally for tiered storage implementations and is expected to support thin provisioning for external storage by YE07.

HP's attempts to differentiate itself from HDS on the storage side and Sun on the data center side with its disaster recovery story have yet to show results. Despite the claimed improvements to its marketing and sales execution plans in 2006, HP was unable to grow or even maintain its revenue market share in the high-end enterprise disk array market. Selling the same hardware/software combination as HDS and Sun, HP's revenue declined 10.9% in 2006 and it went down 1.6% in market share. For 2007, HP has promised a multitude of changes to address these issues, beginning with new leadership in the form of David Roberson (former CEO of HDS, hired 30 May 2007 to be Senior VP and GM for HP's StorageWorks division) and continuing throughout the year with the hiring of additional field storage specialist sales representatives and a revised compensation plan with a stronger emphasis on storage by year end. To reverse the revenue and market share loss, the company needs strong marketing execution from the basics through to its disaster recovery differentiation, more specialized sales representatives to reach potential customers and solid sales execution once it has made the shortlist for a high-end enterprise disk array purchase. HP retains its promising rating on the basis of its recent new hires, future hiring plans and the fine-tuning of its sales strategies, despite a small decline in its relative position within the promising category.

Rating: Promising

IBM continues to excel in providing flexibility around its financial and warranty programs, which makes acquiring the DS8000 and DS6000 attractive from a TCO standpoint, and has enhanced its position in the mainframe market with its HyperPAV offering (introduced in November 2006), designed to improve manageability in zSeries environments. IBM goes to market with a portfolio strategy, bundling servers, storage, software and services together, and has demonstrated a determination not to lose on price.

Although still in the No. 2 position with a solid 22.8% of the market, the momentum that IBM experienced in the high-end enterprise disk array market in 2005 has been somewhat quelled by the lack of additional feature/functionality enhancements. This is evidenced by IBM's 1.6% decline in revenue market share for 2006. The DS8000 and DS6000 still do not support dynamic volume expansion or RAID 6. Although IBM has stated its intention to support these features "within the next year," the company remains behind the technology curve relative to its competitors. Additionally, IBM does not yet support two other features that Gartner identifies as "must haves" in the high-end enterprise disk array market: SATA drive technology, which IBM expects to add sometime in 2008 (although it does support low-cost FC drives), and thin provisioning, which is not yet on IBM's public road map. IBM retains its positive rating despite a slight decline in its relative position within the category.

Rating: Positive

Sun's rating improved somewhat within the Promising category on the strength of its sustained revenue increase and corresponding amplified focus on the mainframe market. Reversing the previous three-year decline, Sun ended 2006 with a 27.9% year-over-year revenue increase and a gain of just over a point in market share. This was due, in part, to Sun offering more promotional pricing, but it is also clearly a function of the product itself. The company continues to reap the benefits of its global distribution, co-branding and go-to-market partnership with HDS. Additionally, Sun is taking advantage of the mainframe expertise gained in the StorageTek acquisition and is boosting its focus on the mainframe by leveraging its tape and tape automation portfolio, and launching the Mainframe Connect Equipment direct support program.

Although the high-end enterprise disk array revenue turnaround is a positive indicator, Sun remains in fifth place in the market, with a 6.7% market share. To continue the rise, Sun must build on its mainframe strengths, act on all it has learned about sales execution and pricing during the past year, and expand its penetration into markets associated with the Solaris operating system.

Rating: Promising