Is Windows NT 5.0 A Threat To Storage Management Software?

There is little doubt that Microsoft Windows NT 4.0 is becoming the network operating system of choice for many end users in all markets. However, storage management software is required for NT 4.0 users who store network data on peripheral storage devices, such as jukeboxes. This storage management software automatically manages, migrates and provides user access to stored data. The release of NT 5.0, scheduled for 1999, has added functionality that may or may not affect the storage management software market.

Increase Storage Capabilities
"The reason storage management software companies exist is because Microsoft cannot provide complete storage functionality," states Gary Brach, president of Smart Storage. "We are specialists in storage and we provide capabilities that Microsoft doesn't. And customers are willing to pay for it." Some of that storage functionality includes writing to removable media, jukeboxes, and multiple media on a network. Brach's Andover, MA-based company produces storage management software for CD and DVD (digital videodisk). Smart Storage is privately held with 55 employees. While NT 4.0 is not capable of supporting jukebox storage devices, Brach says NT 5.0 will have drivers to support jukeboxes. "NT 5.0 may be able to handle jukeboxes, but will it provide the functionality of a specialized storage software company? I doubt it," says Brach. "I think discerning customers will still need storage management software."

Don't Wait For NT 5.0
Richard Kay, president of OTG, says the release of NT 5.0 will not affect his company or how VARs sell storage management software. In fact, he is not convinced that users will migrate to NT 5.0 en masse. "If NT 5.0 is released in 1999, users are going to be too concerned with Y2K problems to change their entire network operating system," says Kay. "Most users will continue to use NT 4.0 and wait for the next generation of NT in 2001 or 2002." OTG is located in Bethesda, MD and has 110 employees. The company is projecting $22 million in gross sales in 1998 and produces storage management software for CD, optical and tape. Kay also says VARs should not wait for the release of NT 5.0. "VARs should sell products that work today and not worry about NT 5.0. No one, except Bill Gates, knows for certain when NT 5.0 will ship."

Can NT Provide Storage Management?
Small software developers that write jukebox drivers will be adversely affected by the release of NT 5.0, says Brach. "In 1984, a lot of developers used to write drivers for CD-ROMs. Microsoft then wrote its own CD-ROM driver and no one could sell a CD driver again," recalls Brach. "Microsoft didn't do a great job in writing the driver, but it was good enough. The jury is still out on whether Microsoft will ever do a good enough job in storage management."

Staying Ahead Of Microsoft
Both vendors agree that selling storage management software offers VARs high margins. However, that could change if future versions of NT offered adequate storage management. "It is a always a concern for companies like us that Microsoft may provide something similar to our products. If Microsoft is almost as good as its competition, that is good enough," says Brach.

Microsoft's recent problems with the Department of Justice may reduce any threat to storage management companies, claims Kay. "With all of its legal problems, Microsoft should be careful about bundling software with its operating system," says Kay. "Any additional functionality in future NT versions will not be duplicated by companies like us. We offer more by enhancing what NT already provides."