iSCSI's Time Has Arrived

Over the past year and a half, iSCSI has evolved from a new technology with emerging standards to an accepted storage networking protocol within businesses. According to a recent IDC report, iSCSI sales revenue is up 22% from the fourth quarter of 2004 through the first quarter of 2005. This is a result of iSCSI storage systems becoming a viable alternative to Fibre Channel solutions for the SMB market. Even some Fortune 500 businesses are beginning to use the protocol in their storage networks.

All of the industry executives we spoke with agree that most end users are looking to IP (Internet Protocol) storage solutions for a robust, lower-cost, simpler-to-manage alternative to Fibre Channel. "Companies of all sizes are looking for durable integrated systems with the benefits of Fibre Channel SANs [storage area networks]," says Sherri Robinson, director of markets for ATTO Technology, Inc. "They don't want a weak imitation of a SAN storing data that isn't critical enough for the investment in Fibre Channel."

Since the reliability of iSCSI has been proven in different environments, the storage industry is talking less about the technology and more about solutions based on IP. Storage VARs that offer iSCSI will be in a better position to meet the demand from midsize businesses wanting to protect business-critical information. "Customers are looking for the enterprise quality and capability of full-featured iSCSI systems, and VARs need to have complete solutions available," advises John Joseph, VP of marketing for EqualLogic, Inc.

iSCSI Affordability, Flexibility A Good Fit For SMBs
The SMB market has embraced iSCSI because it is based on Ethernet technology, which it is already using, and because it is much more affordable than Fibre Channel. iSCSI not only is an option for SANs, it can be used in a number of other diverse applications beyond Fibre Channel SAN alternatives. "IP SANs are a solution for primary storage because they provide the capability for SMBs to move from DAS [direct attached storage] to networked storage solutions," states Jim Schrand, VP of marketing for Wasabi Systems, Inc. "Beyond primary storage, IP-based solutions are also being used for backup, in conjunction with or instead of tape, for a complete tiered storage solution."

Many companies are looking to IP storage for disk-to-disk backup. By combining iSCSI with low cost SATA (serial advanced technology attachment) drives, integrators can build low-cost storage appliances to streamline an end user's backup process. IP storage systems can handle the large amounts of data involved in a disk-to-disk solution. End users are operating IP storage networks with 20, 30, and 50 TB of business-critical data.

Scott Cleland, director of product marketing at 3ware, a Division of AMCC Storage, highlights another iSCSI trend: combining a NAS (network attached storage) file with IP block storage. "This allows you to have a single storage appliance that can act as a NAS box and a block storage device," he explains.

IP storage is gaining momentum because of its lower entry costs as compared with Fibre Channel. The cost to install and manage an IP SAN is close to 50% less than a Fibre Channel SAN. "Not only is the equipment less expensive, the management costs are lower because IT personnel already know and understand Gigabit Ethernet," states Robinson. The advantage for VARs is the ability to sell networked storage solutions to smaller companies.

Joseph adds, "IT staff at an SMB can standardize on a core group of Ethernet switches to meet both LAN and SAN requirements." Using a common set of switches also means that an Ethernet switch dedicated to a SAN application today can be redeployed to support LAN requirements tomorrow and vice versa. This versatility provides a level of investment protection for SAN hardware purchases not provided by Fibre Channel SANs.

Ensure iSCSI Solutions Are Secure
iSCSI is a good fit for both storage and networking VARs to add to their offerings, since IP storage networks are based on Ethernet technology. VARs do need to have some storage technology knowledge and expertise so they can customize the storage solution to the end user. "A good resource for additional information or training is SNIA [the Storage Networking Industry Association]," recommends Schrand.

Don't forget security, cautions Cleland. "Some enterprises have been slow to adopt iSCSI because of security concerns with IP protocols. These users are looking for higher levels of security – Level 3 is typical," he explains. Level 3 security uses Layer 3 switches to control network access based on server or IP addresses. These switches also offer firewall capabilities and intrusion detection.

Improve Margins With Add-Ons, Service
As an emerging technology, IP storage systems carry relatively high margins. Joseph recommends VARs carry modular versions of storage products that offer the storage management features end users are asking for. "Bundling that storage with switches, servers, operating systems, and application packages is where the value comes into play," he advises. "VARs that offer a comprehensive set of products that deliver full functionality in a complete solution will see their margins improve significantly on the package with IP SAN technology."

Schrand and Robinson anticipate VARs earning between 10 and 20 points of margin on IP storage hardware. Margins on IP storage software are higher, ranging from 30 to 40 points. Storage and consulting services will garner the greatest margins. Many midsize companies and departments of large corporations are relying on integrators to guide them through IP storage-based implementations. VARs that offer these types of consulting services should increase their revenues versus VARs that do not.