The Big Four network and systems management (NSM) vendors — BMC Software, Computer Associates (CA), Hewlett-Packard (HP) and IBM/Tivoli — compete in the rapidly growing storage management software market. This market is divided into three functional segments:

• Data management — Backup/recovery and hierarchical storage management/archive
• Enterprise storage resource management (ESRM) — Storage area network (SAN), device management, media management and SRM (event, capacity and performance management)
• Storage infrastructure — Core storage software (file systems and disk utilities), data replication and virtualization software

Driven by 68 percent growth in infrastructure products and 24.5 percent growth in ESRM products, the storage management software market reached $5.3 billion in 2000 (see “The Big Four NSM Vendors and Storage Management,” M-14-4121, for further discussion on competitive positioning). Traditional data management products, which represent 44 percent of the overall market, experienced growth of only slightly less than 9 percent.

EMC pushed ahead of CA and IBM in 1999 to take the lead position. Veritas Software pushed those companies further down on the leadership chart in 2000 by capturing the No. 2 slot behind EMC. It should be noted that most vendors license products once and then provide license updates as part of a service contract. IBM and CA have business models — primarily mainframe-focused — that enable them to obtain a continuous stream of license revenue for installed products.

All vendors relying on mainframe product revenue may find it difficult to grow overall storage software revenue, because the growth of their distributed products will need to offset the slow to negative growth of their mainframe and proprietary systems business. Storage hardware vendors dominate the license revenue chart — many with software products that focus almost exclusively on their own device platforms (e.g., EMC, Network Appliance, StorageTek and Compaq Computer). See Figure 1.

Figure 1

Storage Management Software License Market Share Leaders in 2000

Source: Gartner Dataquest (September 2001)

The Big Four Are Absent From the Storage Infrastructure Software Revenue Leader Charts

Although IBM and HP have storage device businesses, neither has been quick to leverage the opportunity to nurture a value-added software business for infrastructure software in support of those devices. Despite being late, HP made major product announcements in 2001. IBM licenses its array software for an added cost, but does not recognize ongoing revenue for updates, and often heavily discounts or “gives away” the software as part of the hardware sale.

Legacy disk utilities provide CA with revenue in this space. EMC’s presence is driven by software primarily for its Symmetrix systems (array-based replication, multipathing and access control). BMC does not play in this market at all. Network Appliance’s success is based on software for its filers. Compaq supports its StorageWorks arrays. Veritas’ file system and volume management products earn the company its No. 2 position. PowerQuest offers PC and Windows server disk imaging software, but it has recently announced a volume management product as part of a new PowerManage suite. See Figure 2.

Figure 2

Storage Infrastructure Software License Market Share Leaders in 2000

Source: Gartner Dataquest (September 2001)

Mainframe Vendors Have an Advantage in the Storage Data Management Segment

IBM led the data management segment in 2000 with 33.1 percent share — 75 percent from the mainframe platform. CA captured the No. 3 spot, primarily with its ARCserve product, although 17 percent of its revenue in this segment came from mainframe products. Almost 70 percent of BMC’s revenue in data management originates from the mainframe platform.

With the most growth in this segment coming from network backup products, which run primarily on distributed system platforms, most customers and investors prefer to focus on the nonmainframe vendors (see “EMC and VERITAS Lead Storage Software Market," HARD-WW-DP-0014). Mainframe systems still run most of the Fortune 500 financial systems. Although growth in this space is more limited, the tools required to maintain data availability are more mature and serve as a model for products in the distributed space. Veritas' enterprise NetBackup product represents a larger percentage of its data management revenue than does its workgroup Backup Exec product. Legato Systems, with its NetWorker offering, has fallen behind Veritas' NetBackup and IBM/Tivoli’s Tivoli Storage Manager in share; however, it is still on the leadership charts ahead of HP’s OmniBack. BMC plays more in the recovery space than in the backup space. See Figure 3.

Figure 3

Data Management Software License Market Share Leaders in 2000

Source: Gartner Dataquest (September 2001)

Storage Resource Management Products Are Overshadowed by Device Management in the ESRM Segment

Riding the revenue from legacy SRM products helped EMC, CA and BMC maintain leadership positions on the ESRM charts. Mainframe tape management contributed to CA, StorageTek and IBM results. EMC, however, leads mainly through its Symmetrix device management tools, which were early to market and have set the bar for other device vendors to follow. The mainly mainframe-based SRM products that led the market languished as their new owners tried to figure out what to do with the acquired technology.

In 2001, CA has begun to more aggressively market the Vantage product acquired from Sterling Software. BMC has updated the SpaceView software acquired from Boole & Baggage, integrating it into its new Application-Centric Storage Management (ACSM) strategy. Although still available, Softworks products have seemed "lost" since EMC took over the company. Customers running the Windows platform turned to expanded offerings from the historically quota-management-focused vendors such as HighGround (now part of Sun Microsystems) and WQuinn (now part of Precise Software Solutions).

However, work on the desired end-to-end tools that provide a complete view of the storage resources and the intelligence to self-correct basic problems seemed to slow as vendors focused on providing basic tools for better management of disk arrays and the emerging SAN devices. That work will result in increased revenue in 2001 and better management of the storage elements. It will also provide the necessary base of information and connections that will enable the emerging new breed of SRM vendors to provide more functional products. BMC’s ACSM has gotten the most excitement as it extends storage management to its Patrol and Mainview customers. New vendors and vendors that have historically focused on the performance and availability part of the NSM market are hoping to deliver better tools to manage the overall storage resource. However, Gartner is not expecting new integrated tools to appear before 2003. See Figure 4.

Figure 4

Enterprise SRM Software License Market Share Leaders in 2000

Source: Gartner Dataquest (September 2001)

For more details, see “Storage Management Shows Good Growth, But It Could Have Been Better,” HWST-WW-MT-0101.

Bottom Line: The storage management software market is in a period of transition as the focus on improved device management provides the necessary infrastructure for a higher level of software tools that will manage across devices and operating systems. BMC and HP have begun to release products that signal their intent to participate in this next wave. IBM and CA are still working on their strategies. As storage infrastructure and device management products mature, the focus will shift to SRM and providing the richer tools that customers have been waiting for.

This research is part of a set of related research pieces. See AV-14-6438 for an overview.

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