This document was revised on 21 September 2009. For more information, see the Corrections page on gartner.com.

During the economic downturn of 2009, enterprises are struggling to avoid capital IT expenditures while extending the useful life of their storage arrays. Storage service providers can help customers do both. Professional services engagements can frequently free up storage capacity on existing infrastructure, staving off the need to purchase additional infrastructure. Maintenance service capabilities become critical to customers attempting to cost-effectively extend the working lives of existing storage arrays.

Gartner's Storage Services MarketScope is a useful starting point to identify and evaluate storage services from a variety of vendors. Selection should be based on a detailed evaluation of an enterprise's storage needs and objectives compared with a service provider's capacity to fulfill those requirements and expectations. Enterprises need to determine which storage service provider (or providers) can best address their particular requirements.

The service providers presented in this report represent some of the largest and most geographically dispersed storage service companies in the world. But end users have hundreds of other options available to them from value-added resellers (VARs) and system integrators, to pure-play storage consultancies to dedicated managed services for managing storage infrastructure and processes. Frequently, Gartner clients sing the praises of local service providers capable of servicing only a small set of customers with a small portfolio of services. Service value and satisfaction isn't the sole domain of the 11 service providers evaluated in this report.

In 2008, the worldwide storage service market generated more than $30 billion, with $10 billion of that in hardware support services. This is exclusive of hardware and software sales. Compound annual growth rates (CAGRs) for storage services will be a little over 7% (2007 through 2012), which would make the worldwide market opportunity over $39 billion by 2012. However, worldwide economic conditions may affect the ongoing market. North America accounts for the largest portion of the storage services market (43%) with a growth rate of 7.7%. With 9.8% regional share, Asia/Pacific is experiencing double-digit growth (11.3%). Latin America is experiencing the highest storage services growth rate (13.1%), albeit from a 2008 base of just under $1 billion. Individual components of the storage services market are defined below.

Significant changes have occurred among storage service providers over the past year. In 2008, HP stunned the industry with the acquisition of outsourcing giant EDS. In March of 2009, the industry continued to change when IBM began talks to acquire Sun Microsystems, which shook up the market in 2006 with the acquisition of StorageTek. When that deal fell through, Oracle became the acquiring company. Although not directly related to storage services, Cisco's 2009 announcement of its Unified Computing System will almost certainly open up new service opportunities for Cisco storage partners EMC and NetApp. The advent of cloud computing and software as a service (SaaS) is also affecting the overall storage services marketplace. While creating new service opportunities for consulting and managed services, SaaS and cloud computing have the potential to negatively impact or even disrupt other storage services such as hardware and software support, and implementation services.

The services in the following sections comprise Gartner's core storage service segmentation that serves as the baseline for all market sizing and market share assessments.

All of these service categories were taken into account when evaluating storage service providers for this MarketScope. However, the most emphasis was given to professional services, for example, consulting, implementation and management services. (Note: Vendor customer services such as break/fix are evaluated by Gartner in individual vendor ratings.)

Hardware maintenance and support services are preventive and remedial services that physically repair or optimize hardware, including contract maintenance and per-incident repair. Hardware support also includes online and telephone technical troubleshooting and assistance for setup and all fee-based hardware warranty upgrades. Exclusive of parts bundled into maintenance contracts, sales of all parts are also included. This segment includes only external customer spending on these services.

Software maintenance and support services include remote troubleshooting and support done via telephone and online means, installation assistance and basic usability assistance. In some cases, software support services may include new product installation services, installation of product updates, migrations for major releases of software and other types of proactive or reactive on-site services. Software products and technologies covered under this category include operating systems and infrastructure software.

Storage consulting services are advisory services that help clients assess different technology and methodology strategies and in doing so, align their storage strategies with their business or process strategies. These services support customers' IT initiatives by providing strategic, architectural, operational and implementation planning related to storage. Strategic planning includes advisory services that help clients assess their information technology needs and formulate system implementation plans. Architecture planning includes advisory services that combine strategic plans and knowledge of emerging technologies to create the logical design of storage environment and the supporting infrastructure to meet customer requirements. Operational assessment and benchmarking includes services that assess the operating efficiency and capacity of a client's storage environment. Implementation planning includes services aimed at advising customers on the rollout and testing of new storage deployment. In the past year "green" assessments and related consulting services have been added to the mix of storage consulting services.

Implementation services are provided to support the implementation and rollout of new storage infrastructure, including consolidation of existing storage infrastructure. Activities may include hardware or software procurement, configuration, tuning, staging, installation and interoperability testing.

Management services transfer all or part of the day-to-day management responsibility for a customer's storage environment, including storage area networks (SANs), network-attached storage (NAS) and tape libraries, and in some cases the transfer of ownership of the technology or personnel assets to an outside vendor. These services may include system operation or support, capacity planning, asset management, availability management, performance management, administration, security, remote monitoring, technical diagnostics/troubleshooting, configuration management, system repair management and generation of management reports. Storage-on-demand services (the storage utility) and backup and recovery services also fall into this category when some degree of management is included in the service. "Cloud" storage such as Amazon S3 also falls in this category, but no cloud vendor meets inclusion requirements.

To be considered candidates for Gartner's storage services MarketScope, vendors had to deliver at least two of the storage services defined in the previous section and serve clients throughout North America. Only large service providers with annual storage service revenue of $100 million or more were considered, exclusive of revenue from physical tape vaulting. Also, the service provider had to cater to multiple market segments. For example, an independent software vendor (ISV) providing software support and no other storage services would not qualify. Qualifying companies ranged from hardware manufacturers and ISVs, to large outsourcing service providers. Although some storage resellers and integrators (for example, CDW, Forsythe Solutions and Datalink) deliver a level of storage services, they were excluded from consideration because the focus of this MarketScope is on storage OEMs and ISVs. Also, this assessment does not include many additional specialty or regional service providers that offer varying levels of storage services ranging from consulting, to implementation services and to managed storage services.

The storage services market is mature overall, with user requirements well-understood and their needs largely being met. Even so, there is a great deal of room for overall vendor improvements in service offerings, improved methodologies and service innovation. For example, service providers rely heavily on on-site residencies to deliver managed administration services. Compare this to managed network administration, which is overwhelmingly delivered remotely. New storage technologies will always open up new opportunities for service providers that can architect and implement them into customer solutions, so even though the market is mature it will remain ever-evolving.

Brocade had the smallest storage service revenue among companies featured in Gartner's 2008 storage service market share report ($248 million), but its revenue growth topped competitors (30% year over year). Rebranded as Brocade Global Services in 2009, the company's service organization is tasked with growing storage service revenue at over twice the market rate through 2012. Such aggressive growth can't be achieved organically, so Brocade's storage service growth will also depend on multiple service acquisitions.

The acquisition of Strategic Business Systems (SBS) in 2008 highlighted Brocade's intent to become a serious professional services contender, including server virtualization as well as storage services. Later in 2008, Brocade acquired Internet Protocol (IP) switch maker Foundry Networks, which increased Brocade service head count by an additional 25%. Brocade is investing significantly in developing IP professional services capabilities as well as expanding proactive support and networking monitoring services to include IP networks. In 2009, the company moved all of its Americas professional services head count to SBS, making it the de facto professional services delivery arm of the North America.

Brocade maintains direct relationship with strategic accounts. Other customers are serviced through channel partners and major storage OEMs. Brocade is in the process of developing a professional services certification program for resellers that will be available by September 2009. In addition to traditional network-related services, Brocade also offers data migration services that leverage a proprietary appliance. As well as providing direct end-user support, Brocade is also a service delivery partner for several storage OEMs and service companies.

Rating: Promising

CSC is the third-largest worldwide IT management company behind IBM and HP. Gartner estimates storage-related service accounted for more than $2 billion of the company's 2008 revenue. In 2008, CSC shifted overall corporate focus from a geographic and line-of-business orientation to a vertical industry model.

From a storage infrastructure standpoint, CSC maintains strategic relationships with EMC, Hitachi Data Systems, IBM, NetApp, Brocade, Cisco and Symantec. The company claims that during the past year, the amount of storage it manages has increased 25%. The majority of storage service revenue is derived from managed operations, although the company provides storage consulting and assessment services. Implementation services are usually provided in conjunction with managed services. Hardware and software support are outsourced.

Storage encompassed the first services defined in CSC's service catalog that defines a range of customer storage choices ranging from managed to shared to self-service utility offerings. CSC will add cloud storage to the catalog in the fall of 2009 as a lower-cost alternative storage tier built upon the EMC ATMOS product. The company is also developing a hierarchal storage management service to provide policy-based migration of unstructured NAS data to ATMOS storage.

Rating: Positive

Dell's product family spans its low-end PowerVault line, midrange EMC CLARiiON and iSCSI storage products through its 2008 acquisition of EqualLogic. The acquisition expanded Dell's storage service staff by 158%. Gartner estimates that Dell's 2008 storage service revenue approached $750 million, giving the company a 2.5% share of the storage services market.

In early 2009, Dell reorganized globally around three major customer segments: large enterprise, public sector, and small and midsize businesses (SMBs). Dell's Global Services organization aligns with those three business units and is responsible for creating and delivering services specifically to them. Dell markets its services under the categories of ProManage, ProConsult and ProSupport. Managed services include residencies and partnered services for remote backup administration. Pilots are in place for remote data and infrastructure management including storage.

Dell claims that most storage services are provided directly by Dell-badged employees. However, a number of service delivery partners augment Dell's capabilities. Some of these include Unisys for break/fix, SBS for implementation and consulting services, GlassHouse Technologies for consulting and managed services. EMC is a major resource for services related to EMC-branded CLARiiON arrays, and EMC and Dell have reciprocal agreements for access to professional services delivery personnel.

Rating: Promising

EMC is the market leader for controller-based storage systems. EMC was the second-largest storage service provider, trailing only IBM, until HP acquired EDS. EMC storage services are segmented into professional services (a major EMC focus area) and customer support. In early 2008, EMC consolidated its consulting services into the 2,700-strong EMC Consulting organization. EMC Consulting is responsible for industry and technology consulting and has been grown organically and through several recent acquisitions, including the 2007 BusinessEdge and Geniant acquisitions and in 2008, the acquisition of Conchango in the U.K. EMC Global Services' professional services practices include consulting, solutions (applications including SAP, Oracle and Microsoft, VMware and physical security), technology deployments, managed services and education services. Implementation services are now in the Technology Solutions and Services organization, with roughly 6,000 people worldwide. Professional services capabilities are strongest in North America, somewhat less in Europe and still less in Asia/Pacific, where the company uses service delivery partners extensively.

Gartner estimates EMC's customer service organization to be 5,400 people strong. Hardware support is primarily delivered directly for Symmetrix and through service partners for CLARiiON. Midsize customers are also serviced through certified resellers under the Velocity2 Authorized Service Network and subcontracting authorized service provider programs. In 2008, EMC extended outsourced disk replacement responsibility to authorized service provider partners. Although EMC uses offshore support resources, its responsibilities are primarily focused on analytics and service engineering. EMC considers customer support an investment ("cost") center with no profitability goals.

EMC's primary eSupport tool, PowerLink, has fallen behind tools from many competitors, with numerous customer complaints regarding ease of use. Although it was improved in 2008 with the addition of new capabilities such as My Support and Live Chat to address eSupport, market leadership will require the development of completely new eSupport tools, which the company is undertaking.

EMC is making customer satisfaction the hallmark of its support organizations, with every customer-related service employee's annual review based on customer satisfaction scores. EMC has also put considerable capital and effort into technologies to identify the controllable touchpoints of customer satisfaction, and now claim to be able to identify situations where customers are likely to escalate a service problem so that EMC can step in and resolve the issue proactively.

Rating: Strong Positive

Hitachi Data Systems is a wholly owned subsidiary of Hitachi and is the go-to-market arm of Hitachi in all countries, except Japan. The majority of Hitachi Data Systems revenue (roughly 80%) is generated in North America and Europe, the Middle East and Africa (EMEA). Services account for nearly 22% of the company's overall revenue.

Hitachi Data Systems' product portfolio include high-end and midrange arrays, plus a platform for small businesses and NAS storage from BlueArc. Hitachi's direct support is limited to its high-end arrays with support for other products delivered through channel partners. Hitachi Data Systems has earned a reputation for building reliable storage systems that support nondisruptive microcode updates, repair activities and upgrades. Although this is positive, limited interaction with customer support professionals frequently means that Hitachi Data Systems customers don't have a strong opinion about the company's support service capabilities. In 2008, Hitachi Data Systems combined its professional services, customer services and service technology into a single organization in order to develop and deliver service solutions. Also in 2008, the company relegated simple disk swaps to a third party to leverage Hitachi Data Systems-badged technicians to higher-value repairs and is expanding the relationship for on-site hardware support delivery.

Hitachi Data Systems professional services focus almost exclusively on services related to its product sets including assessments, implementation services and consulting. Managed services in North America include remote monitoring and reporting and staff augmentation. Hitachi Data Systems has made several attempts to launch remote administration services and establish a remote managed services practice. Growing from an initial service in EMEA, Hitachi Data Systems is expanding managed services to North America and Asia/Pacific, and will announce new managed services later in 2009. Other services are delivered through a small network of service partners including Entelligence, Contech, GlassHouse Technologies, IBM and Hitachi Consulting.

Rating: Promising

HP is the world's largest infrastructure support and hardware services company and, with the 2008 acquisition of EDS, is the world's second-largest outsourcer behind IBM. Services account for 32% of HP's business and with the addition of EDS storage service revenue, HP becomes the second-largest storage service provider, again behind IBM. Storage services are developed and delivered by HP's Technology Solutions Group (TSG), which encompasses Enterprise Storage and Servers, HP Software and Solutions, Technology Services and EDS, an HP Company. In 2008, HP dissolved its Consulting and Integration service organization and integrated the professional services capabilities across TSG. Previously, organizational boundaries at times created operational hurdles to obtaining some storage professional services such as assessments and storage architecture development and implementation. Multivendor support services have been a strength at HP since the 2002 acquisition of Compaq and were bolstered even further through the EDS acquisition.

Although the acquisition of EDS greatly enhances HP's presence in mainframe environments and delivers strong multivendor capabilities for mainframe storage management, the integration of the two companies is major task that is still in progress. One of the foremost challenges will be migrating EDS customers to HP products, where and when appropriate. EDS's Agility Alliance is still in place and continues to offer technology solutions from HP rivals Sun Microsystems, EMC and Cisco. Another challenge will be seamlessly integrating HP and EDS people, tools, processes, methodologies and systems. This integration has already caused some account disruption among some accounts, with assigned account executives from HP and EDS sometimes vying for the same job. HP continues to address the challenges and claims to be seeing customer satisfaction improvements.

Rating: Positive

With more than 20% of the storage services market, IBM is the worldwide storage services market share leader. The company also has an enormous worldwide presence with over 60% of its storage service business outside of North America. Organizationally, IBM provides storage services through various functional areas within Global Technology Services (GTS). Consulting and implementation services fall under the auspices of Systems Services, while hardware and software support are managed by Maintenance and Technical Support. Most managed storage services, developed by Systems Services, are delivered via the Integrated Technology Delivery (ITD) organization. Cloud-based managed server backup services fall under Business Continuity and Resiliency Services. Previously, storage and server services in GTS were separate organizations, but were combined under a single vice president.

As well as delivering product support services directly to its customers, IBM is also the on-site break/fix service for a number of other vendors; most notably NetApp in storage. Like HP, IBM is a major provider of multivendor support services, largely a product of its outsourcing business where non-IBM hardware and software is commonplace.

For the past several years IBM has used the term "asset-based services" to distinguish itself from other storage service providers. The "assets" are proprietary tools, technologies and processes either developed internally or through the acquisitions of Softek (2007) and Novus Consulting (2008). Novus Consulting was a vendor-neutral storage service consultancy, and IBM claims to have maintained that distinction since the acquisition. Although many Gartner clients are concerned that IBM storage hardware and software will be favored in storage consulting recommendations and architectures, Gartner has yet to witness this but will continue to monitor closely.

Rating: Strong Positive

NetApp is a large global provider of external controller-based disk storage systems and associated disk data management software, data protection software, data retention software and support services.

NetApp professional services are delivered directly, through service delivery partners and through authorized channel partners. In 2009, the company made a strategic decision to increase its use of authorized channel partners for professional services delivery, reducing the size of its internal professional services organization as well as decreasing future bottom-line professional services revenue. Consulting services range from data migration to storage architectures. Assessments are primarily around data classification or infrastructure services. Implementation and managed services round out the company's professional services although managed services are limited to on-site residencies.

NetApp offers two customer support offerings: SupportEdge Premium and SupportEdge Standard plus a secure support offering for government agencies. Phone support is outsourced to a U.S. provider for SupportEdge Standard customers while SupportEdge Premium customers are connected to NetApp employees at one of three worldwide support centers. Almost all on-site customer support is delivered by IBM, authorized support providers and third-party maintainers subcontracted by NetApp.

Gartner considers NetApp among the market leaders for storage eSupport tools, and support and serviceability engineering. Customers report that NetApp's NOW technical support site is among the easiest to navigate and provides very valuable tools and information.

Rating: Positive

Sun Microsystems storage products consist of several product families, some of which are resold arrays from other vendors such as Hitachi Data Systems and LSI. It also markets tape products acquired through the 2005 StorageTek acquisition. Gartner estimates Sun storage service revenue at $1.6 billion, making the company the fourth-largest service provider among storage OEMs.

Sun Services are designed primarily to support technology at the network, infrastructure and middleware layers. Managed services include residencies and a small outsourcing practice. The extension of remote management services to its customer base helped Sun reduce its cost structure to deliver operations and support services by removing most premises-based personnel and some break/fix dispatch. Sun's managed services capabilities have improved its customer service quality through proactive threshold monitoring, and improved software and change-management practices.

Consulting and integration services are focused on IT architecture, technical consulting, technical assessments, migration services and IT service management processes. Under its VIP Program, Sun collaboratively supports products from more than 100 providers. It operates support centers with SAP, Oracle and Symantec, and has joint support agreements with EMC, IBM and others. Sun has three levels of support: silver, gold and platinum. The company also runs a small third-party maintenance business acquired through StorageTek.

Over the past year, Sun's service organization has undergone many changes, both in structure and management. The company combined professional services sales and delivery into a single organization as well as combining the storage and regional system technology centers into one global organization. In 2009, Joe Heel became senior vice president of Sun's service organization. He had previously been responsible for Sun's Industries & Partners sales organization, as well as the company's Global Storage Practice.

In April 2009, Oracle announced its intention to acquire Sun. Oracle has not revealed how the acquisition will impact Sun's storage, tape and service businesses, and speculation is rampant that segments of its business will be spun off. This uncertainty was a major factor in Sun's storage service rating and is the only reason Sun was rated a Caution.

Rating: Caution

Symantec is primarily an infrastructure software company servicing businesses and consumers with products and services for security, availability, performance and data protection. With the acquisition of Veritas in 2005, Symantec became the market leader in server backup software and today remains the market share leader with roughly 45% market share according to Gartner estimates. In the security space, Symantec remains the market share leader with roughly 27% market share, although that is leveraged to consumer antivirus, where the company has a 64% share and enterprise antivirus (a 36% share). Enrique Salem became president and CEO of Symantec on 4 April 2009. Subsequently, he reorganized the executive team and announced a vision to derive 15% of revenue through software as a service.

During the past several years Symantec has launched a number of online managed services targeting SMBs and enterprises, including managed backup for PCs and servers, a managed e-mail archiving service through the acquisition of MessageLabs and an energy assessment service. However, the majority of the company's estimated 2008 $621 million in storage service revenue is derived through product-related services such as software support, consulting, implementation services and on-site and remote managed operations.

Rating: Positive

Although still technically a hardware company, today about 90% of Unisys revenue is derived from service operations. Outsourcing accounts for the majority of Unisys service revenue (42%), followed by consulting and system integration (35%) with the balance coming through infrastructure services and core maintenance. Gartner estimates 2008 Unisys revenue derived through storage-related services at $535 million, essentially flat from the company's 2007 storage service revenue. The company has a worldwide presence in 100 countries, although 78% of revenue is generated in North America and Europe.

In addition to providing storage services to end users, Unisys is also the break/fix service delivery partner for many other companies such as EMC and Dell. These relationships provide a welcome revenue stream but preclude opportunities for third-party maintenance on partner products.

Unisys's anemic commercial performance in recent times has caused the viability of the combined organization to come into question.

Rating: Promising