Storage explosion

Growing IT markets is boosting Middle East’s storage investment. Industry analysts claim this growth will continue for the next five years, as enterprises and governments in the region put data storage high on their agenda.

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By  Angela Prasad Published  December 1, 2004

|~||~||~|Gone are the days when storage just meant an empty space on a computer or storing some important data on a zip drive. Today, storage has become an integral part of enterprises. Globally, storage has grown enormously, partially due to the events of 9/11 and the mishap of the business sector. The WorldCom and Enron debacles have given new meaning to the importance of storing data.

In the Middle East, storage has been maturing rapidly. Now, storage is all about consolidated solutions for businesses. The buzzwords are network area storage (SAN), storage area network (SAN) fibre attached storage (FAB) and disaster recovery (DR).

The software used for storage systems plays a key role in enhancing performance and supporting multiple hardware systems. It provides the end user cost benefits and an information infrastructure for businesses, call centres, service providers and e-business to execute, scale and provide better services. Enterprises are using applications such as customer relationship management (CRM), enterprise resources planning (ERP) and supply chain management (SCM) to conduct their business. At the end of the day they need to collect the data from all the different apps and store it securely.

The total spending on storage software in 2003 went up by 32% in the Arab Gulf states, according to research firm IDC. The analyst house also forecasts that similar or even higher growth will continue through to 2008. Saudi Arabia accounted for the largest share of last year’s storage software market, followed by the UAE.

Together, these two nations represented almost three-quarters of the storage software spend. Backup and archiving software constituted the largest share of the sales followed by storage resource management, as companies sought to take advantage of networked environments and underused capacity.

The top four vendors captured more than 77% of the revenue cross the region. EMC took the lead by successfully leveraging its storage hardware business to move software solutions. Veritas took second place followed by IBM and Computer Associates (CA).

A number of key verticals accounted for the bulk of the spending. The process-manufacturing sector (mainly oil& gas) represented the largest source of demand with 30.7% market share, followed by the finance sector, which stood at 24%. Other key segments included telecommunications and the public sector. “Spending will continue to be concentrated in these key verticals. Nevertheless, a lot of smaller companies in other segments have been expressing interest in storage solutions, which suggest a potentially lucrative development of the market,” says Heini Booysen, senior analyst at IDC CEMA’s software group.

In the Middle East, EMC has strengthened its market share by winning key business deals with companies such as MobileCom, a subsidiary of Jordan Telecom, as well as Vodafone Egypt. The vendor has provided these organisations with business continuity solutions based on its Symmetrics DMX systems. Its Clariion series of storage solutions have also helped the vendor take the first position.

“Business opportunities are enormous in this market. Although the Middle East market is an emerging one, it is starting to mature. Businesses are starting to understand the importance of information and data and how these two things are going to affect their operations and their decision making process. They are beginning to realise that they need to store their data. For instance, if a bank wants to offer better services to their customers, it has to understand the needs of their customers. In order to do this, it needs to have better access to information,” says Mohammed Amin, general manager for EMC Middle East.

The region’s growing small-to-medium sized businesses (SMBs) are also fuelling the growth. Data management and protection have traditionally been less of a concern for SMBs, but they are quickly realising the value of their data and vendors are eager to exploit this newfound opportunity.

Veritas says SMBs want greater peace of mind around three key areas: knowing that all their important data is backed-up fully, that they can easily recover all their data at any time, and that the overall data management is as simple as possible.

“SMBs in the Middle East region are becoming quite savvy when it comes to storing data and that is what is leading to this growth. We are working with our partners to provide the required tools, training and products to businesses in this segment. Veritas Backup Exec software is the market leader in server backup software used by SMBs,” says Sam Tayan, regional manager for Veritas Middle East. ||**|||~||~||~|Jeddah Chamber of Commerce and Industry (JCCI), which has recently deployed STME’s enterprise storage solution, says it is important to store data in today ‘s business environment.

“The reason we have strengthened our storage facilities is to fulfill our objectives. Increasing the accessibility and availability of information is vital to advancing JCCI’s goals, which range from increasing its percentage of SMB members to reducing the administration required by the organisation’s growing amount of data. The new solution offers JCCI all the advanced functionality and connectivity required for its growing networked storage environment,” says Mohi El-Din Hakami, director of information and e-services at JCCI.

STME claims that Jeddah is among the fastest developing markets for storage solutions. In addition to the JCCI project, the company has witnessed a surge in demand from Jeddah’s public, as well as the retail and insurance sectors.

“Businesses in the Middle East are using a variety of different software to run their business; hence collecting large amounts of data, which has to be stored somewhere and this is what is driving the software storage explosion. Let’s take JCCI of instance; the government body uses a variety of different apps and it needed a secure storage platform to store the data it collected,” comments Andrew Calthorpe, senior corporate vice president at STME.

Hitachi Data Systems (HDS) says the software storage boom is manifold. However, at the forefront of the driving factors is the advent of storage area networks (SANs), which according to HDS, has matured in the Middle East. Now, SANs have to be managed and this is where storage software comes into play.

“In today’s competitive environment businesses cannot separate software storage from hardware storage because storage is about software. IT has become more complex than it ever was before and customers are demanding more and more functionalities with their storage facilities,” says John Bentley, sales director at HDS Middle East.

“Now, we are talking about sharing data from a whole variety of different systems applications. Customers want to transfer data from all these different systems. Let’s say an organisation has a complete Hitachi SAN to store its data, but it uses applications of more than one vendor and wants to
access that data from SAN. Previously that was not possible, however for the first time our new Universal Storage Platform is able to do the virtualisation of storage. It is just one huge disk farm and it does not mater which vendor’s application it is,” Bentley explains.

HDS has recently released its high-end storage subsystem that it claims can scale up to hundreds of terabytes of capacity and offers functionalities such as long-distance data replication and migration. The TagmaStore Universal Storage System, a series of three arrays based on a switched architecture can scale to 332TB of internal storage and manage up to 32 petabyte of external storage.

“Due to the events of 9/11, businesses are actually taking time out to think about the security of their data. There is a huge requirement for disaster recovery, back up and business continuity. Businesses need to manage the storage and they need to manage it much more effectively than ever before to replicate or to preserve data over long distances. In the Middle East, the distance is quite vast, but previously there was no software solution to enable long-distance data replication,” he notes.

Like other storage vendors, HDS also believes the real software storage explosion is in the region’s SMB segment of the market. SMBs are becoming technology savvy and starting to collect lots of data. “The most interesting thing is that the sophistication which was previously let’s say the preserve of just the enterprise customers, is now creeping into the SMB space. The costs of storage is coming down; hence is more affordable to smaller businesses,” Bentley adds.

EMC, which usually targets the enterprise sector, is now targeting SMBs with its new network storage solution called Celerra NS500. The vendor believes SMBs should also be able to enjoy mission critical solutions. “Our focus will continue to be on our enterprise customers, however we will pay more attention to our smaller customers. SMBs and enterprises are from two different segments of the market and EMC has the resources to cover both,” adds Amin.

Furthermore, HP’s new StorageWorks Grid will also contribute to the region’s software storage boom. Extending the roadmap into 2008 and beyond, HP plans to deliver on management convergence for the StorageWorks Grid through capabilities including changeable smart cell functionality, seamless repository virtualisation and completely unified StorageWorks Grid.

“We believe the unabated data explosion should be supported by diverse technology choices and tailor made strategies to protect data and information,” says Hazem Bazan, director of solution partner organisation (SPO) at HP Middle East.

The introduction of new global financial regulations is also driving the demand for storage. In accordance with regulations demanding accountability and transparency as well as data archiving for anything up to eight years, banks are required to overhaul their existing storage systems.

Mashreqbank, which stores huge amounts of data, says the software storage boom in the Middle East is well underway and it is going to continue over the coming years. According to the bank, most businesses in the region have started to understand the importance of storing information.

“Customer information is critical and it probably is one of the most valuable asset for a business. Any business that has a high degree of customer contact needs to have a proper data storage facility. Furthermore, data is not only important to large corporations, small businesses need to store their data as well,” says Karan Kapur, vice president of marketing at Mashreqbank.

Bank of Beirut, which has recently overhauled its storage infrastructure with Computer Associates’ BrightStor solution, shares Kapur’s sentiments. It believes data storage and disaster recovery are critical for financial institutions.

“In order to have a smooth running of our business and to protect ourselves from data loss, we have to effectively store and back up a huge number of files that reside on hundreds of machines running different operating systems. We have deployed the new solution to successfully meet this formidable challenge. Deployment like ours is what is driving the demand for storage,” says Najib Ghanem, IT manager at Bank of Beirut.

International Food Stuff Company (IFFCO) also believes the region’s software storage market is witnessing an explosion. IFFCO says in order to fully protect data; businesses have to bring a new level of precision and automation to their storage management processes.

“Over the years businesses have managed to collect large amounts of data that need to be stored not only from a disaster point of view, but also from the archiving point of view. As businesses grow their data grows too, so there has to be some kind of data back up. In today’s competitive market, businesses can not afford to have any downtime,” comments Venkatesh Mahadevan, general manager of IT Group at IFFCO.

IDC’s Booysen agrees with Mahadevan. He says data loss can have an adverse impact on businesses and they are not willing to take that risk. Organisations are exploiting innovative technologies to store their data safely.

“Storage awareness is growing fast among companies and this will lead to the continuing expansion of the Arab Gulf Software storage market. However, storage vendors need to invest in user and channel-education campaigns and ramp up sales efforts to make sure the benefits of their solutions are known across the value chain,” enthuses Booysen.

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