EMC hopes to shake up the storage market next week with a low-priced NAS product. The NS500 low-cost network attached storage system is aimed at mid-size companies.

At the same time, it will announce the NS704G and NS500G, designed to integrate NAS with SANs. They include software and management features from its Celerra management software, and support for iSCSI.

EMC's move into network attached storage follows a pre-emptive strike by IBM with its lower-end TotalStorage NAS Gateway 500 system. Both companies are filling their NAS systems with features and price points that should appeal to mid-size companies and department-level units.

EMC's support of iSCSI will help lower the system's total cost by simplifying network management, said Tony Asaro, an analyst at Enterprise Strategy Group: "It is important that EMC is supporting iSCSI. This allows customers to use NAS for file sharing and iSCSI for exchange and database storage using the same network infrastructure."

Talking IBM's NAS Gateway 500, its product manager David Vaughn said: "These systems offer the same management features and functionality - we've just removed some components the entry-level market doesn't require." The NAS Gateway 500 starts at $30,000.

These lower-cost NAS products are designed for the midsize-business market, where IT dollars are hard to come by, said Dianne McAdam, senior analyst and partner at Data Mobility Group. "They have to be easy to use, as well as affordable. That's one reason you're seeing more Windows elements in the products," McAdam said.

Whereas high-end vendors such as IBM and EMC have been moving downmarket, NAS heavyweight Network Appliance is moving up. In May, it rolled out its FAS920 and FAS920c storage systems with support not just for iSCSI but also for the higher-end Fibre Channel.

"It's a compliment that other companies have been coming into our space," said Keith Brown, director of technology at Network Appliance. "For a long time, they viewed NAS as an annoyance, but now they can't ignore it. That validates our position."

As companies have begun to move storage off servers and instead attach it directly to networks, NAS systems have become increasingly popular. The market for NAS is growing at approximately nine percent, according to Gartner. EMC said its NAS revenue for the second quarter increased 40 percent over that of the same quarter last year.

"We're seeing a growing percentage of our customers buying NAS," said Tom Joyce, senior director of NAS at EMC. "There's no question about the trend."