IBM will resell NetApp NAS and iSCSI products with a big blue badge on them. The two companies are positioning their new alliance as a 'team to take on EMC'.

It's a two-way street, ostensibly. IBM will sell branded solutions based on NetApp's network attached storage (NAS) and iSCSI/IP SAN solutions, including NearStore and the NetApp V-Series Systems (virtualising NAS heads) plus associated software offerings. NetApp will integrate its applications with Tivoli Storage Manager and prefer it as a backup and recovery product. NetApp will also treat IBM as its preferred supplier of tape systems. The two companies may do more together in the future.

Why are they getting together?

First of all the NAS market is strong and IBM has a relatively weak position in it. NetApp's position is much stronger. It gains possibly the world's best sales channel and also a good line of tape products to push to its customers. IBM gains the world's best and most successful NAS product line, NetApp's iSCSI products, and its NAS/iSCSI product range is transformed to one that matches EMC's NetWin, NS Series and Celerra NAS offerings, and its iSCSI-capable AX arrays.

Andy Monshaw, IBM Storage Systems general manager, said: "The choice for customers (is between) open solutions from IBM and NetApp that provide systems level innovation versus proprietary point solutions from EMC."

Of course, as reported here, EMC rubbishes this view; Rick Lacroix, an EMC spokesman, said the agreement showed up the weaknesses of IBM and Net App. Network Appliance has a: "lack of global reach and a lack of a total solutions offering." For IBM it highlights: "the lack of success they've had in the NAS market," Overall: "There is nothing new for the customer in this announcement."

Market share numbers
International Data Corp. (IDC) recently announced that NetApp was the revenue share leader in both NAS and iSCSI for calendar year 2004. Ironically back in 2002 EMC was number 1 in NAS revenue, according to a report from Gartner Dataquest. But in 2003 IDC reported NetApp had a 37 percent NAS revenue share, with EMC at 35.4 percent.

In 2004 we learn here that: "In the NAS market, which grew 14.7% year over year, Network Appliance led with 36.9% revenue share, followed by EMC with 32.8% share. The iSCSI SAN market continues to show strong momentum, posting nearly 32% revenue growth compared to Q3 2004. Network Appliance continues to lead the market with 38.9% share, followed by EMC with 25.6% share."

Clearly NetApp has a leading but closely-contested position in NAS and iSCSI. IBM's in-house NAS and iSCSI products are few. Now, though, their future must be under review.

And then there's EMC
Secondly, IBM is making a strong competitive marketing push against EMC. It believes its virtualisation products and DS6000/8000 drive arrays are strong products, particularly with the DS8000's logical partitioning (LPAR).

A Meta Group report, Disk Storage Subsytems: The Economic Challenge, looking at the DS6000/DS8000 series, states: "IBM intends to 'take off the gloves' in its attempt to regain market share lost to competitors (primarily EMC) during the past five years." Sue Clarke, senior research analyst for the Butler Group, writes in an October 14th Butler Opinion Wire: "IBM has annnounced its intention to compete more aggressively with EMC, as it aims to become the number one vendor in disk storage."

It might be a good time to re-negotiate drive array pricing with both IBM and EMC.

However good its primary drive array and virtualisation products, IBM cannot afford to cede the NAS space to EMC, or, indeed the iSCSI space. Enter white knight NetApp.

HDS joins the fray
Co-incidentally Hitachi Data Systems has also made strong NAS moves. It's announced a NAS blade for its TagmaStore multi-vendor virtualising drive array, and also said it aims to move full-tilt into NAS, stating it is going to make: "a full-scale product assault on the network-attached storage (NAS) market." We will see: "the introduction of multiple new NAS products spanning the high-end enterprise to the SMB market."

Shinjiro Iwata, HDS' CEO, says: "The industry needs to be aware: Hitachi is coming at the NAS market strong and hard."

This is unfortunate for NetApp on two counts. Currently HDS resells NetApp NAS products. An obvious result of HDS' new policy is that the NetApp products will be dropped, not that anything has been said officially by HDS. Oh well, you can hear NetApp staffers say, you lose one, you gain one, and IBM has a wider sales channel than HDS.

Another strengthening competitive factor for NetApp is that HDS partner Sun can be expected to pick up the HDS NAS offerings. It's already added the TagmaStore NAS blade to its StorEdge 9990 system.

Potential suppliers of your NAS and iSCSI systems will now be fighting strongly for your business. HDS and Sun, IBM and NetApp, and EMC will all be giving you strong messages about their technologies and value over the coming months. Prepare to be deafened.