This document was revised on 18 August 2010. For more information, see the Corrections page on gartner.com.

Many analysts, journalists and enterprises are characterizing 2010 as "the year of the cloud" because of the level of interest surrounding cloud compute and cloud storage. Indeed, the theme of EMC World 2010 was "The Journey to the Private Cloud." But whether the discussion centers on private or public clouds or some hybrid of the two, services are recognized as essential to successful implementations and integrations. This is one of the reasons this MarketScope weighed cloud-oriented storage services more heavily than ever before. But the vast majority of storage services today don't involve the cloud. During the economic downturn of 2009, enterprises struggled to avoid capital IT expenditure while extending the useful life of their storage arrays. During the past year, many storage service providers have helped customers do both. Maintenance service capabilities became critical to customers attempting to cost-effectively extend the working lives of existing storage arrays, but many customers unhappily discovered that purchasing new arrays may actually be less expensive than a three-year maintenance contract.

This document 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), system integrators and pure-play storage consultancies to dedicated managed service providers — 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 aren't the sole domains of the 10 service providers evaluated in this report.

Hard hit by the recession of 2008 and 2009, the worldwide storage professional services market lost 11% in 2009. Gartner believes recovery to 2008 revenue levels won't occur until at least 2011 and beyond. The worldwide storage professional services market declined $1.7 billion in 2009 to slightly less than $14 billion. By 2013, the market is expected to grow to almost $18 billion at a paltry 3% worldwide compound annual growth rate (CAGR).

The Asia/Pacific geography remains the fastest-growing segment of the storage service professional services market, growing at twice the rate of storage services worldwide — albeit from a much-smaller base than North America or Europe, the Middle East and Africa (EMEA). Individual components of the storage service market are defined in this document.

Significant changes have occurred among storage service providers during the past two years. In 2008, HP stunned the industry with the acquisition of outsourcing giant EDS. More outsourcing acquisitions followed suit, with Dell acquiring Perot Systems in late 2009 and Xerox completing the acquisition of ACS in 2010. In March 2009, the industry continued to change when IBM began talks to acquire Sun Microsystems, which itself shook up the market in 2005 with the acquisition of StorageTek. When the Sun Microsystems and IBM deal fell through, Oracle became the acquiring company, and subsequently, Oracle totally revamped Sun's maintenance services. While not totally related to storage services, EMC, Cisco and VMware formed the Virtual Computing Environment (VCE) coalition with a separate service organization (Acadia) now headed by Michael Capellas, former CEO of First Data and Compaq.

The advent of cloud computing and software as a service (SaaS) is also impacting the overall storage service market. 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. Although hyperbole continues to surround cloud storage infrastructure as a service (IaaS) — the public storage cloud — the market is still in the nascent phase. As a consequence, many companies will fail to reach maturity in a highly competitive market. Examples of early failure are represented by 2009 startup Vaultscape shutting down operations in early 2010, followed by ParaScale later in the year.

The following services comprise Gartner's core storage service segmentation that serves as the baseline for all market sizing and market share assessments. It should be noted that 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 (i.e., consulting, implementation and management services). (Note: Vendor customer services — e.g., break/fix — are evaluated by Gartner in individual vendor ratings).

• Storage hardware maintenance and support services — 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.

• Storage software maintenance and support 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 — 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.

• Storage implementation 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.

• Storage management services — 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, transfer ownership of the technology or personnel assets to an outside vendor. These services may include systems 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 known as Simple Storage Service), falls into this category as well, but no cloud vendor currently meets the 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. Additionally, 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. Finally, qualifying service providers must deliver some segment of their services directly. It is for this reason that Symantec was dropped from this MarketScope because it no longer delivers professional services directly.

Qualifying companies ranged from hardware manufacturers and ISVs to large outsourcing service providers. Although some storage resellers and integrators (e.g., CDW, Forsythe 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. Additionally, this assessment does not include many additional specialty or regional service providers that proffer varying levels of storage services ranging from consulting to implementation services to managed storage services.

The storage service 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, many 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 ($252 million) among companies featured in Gartner's 2009 storage service Market Share report, and it was one of only two storage service providers showing positive revenue growth in storage services compared with 2008. Rebranded as Brocade Global Services in 2009, the company's service organization is tasked with growing storage service revenue at a 25% to 30% CAGR 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 contender in the professional services market that includes server virtualization and storage services. Also in 2008, Brocade acquired Internet Protocol (IP) switch maker Foundry Networks, which increased Brocade's service head count by an additional 25%. In 2009, Brocade moved all of its professional services head count to SBS, making it the de facto professional services arm of the company. Brocade is currently investing significantly in developing IP professional services capabilities as well as expanding networking monitoring services to include IP networks. As a consequence of focusing on developing services related to Foundry products and preparing for converged network services, Brocade's SAN-related services neither advanced in 2009 nor this year.

Brocade maintains a direct relationship with 150 named accounts. Other customers are serviced through channel partners and major storage OEMs. A new Brocade Professional Services Program (PSP), announced in September 2009, allows a selective group of channel partners to deliver a wide scope of Brocade IP professional services or resell their own services as Brocade-certified. Brocade also announced the Support Delivery Program (SDP), which enables selective channel partners to deliver Tier 1 and Tier 2 support, as well as traditional network-related services; Brocade also offers data migration services leveraging a proprietary appliance. As well as providing direct end-user support, Brocade is also a service delivery partner for other companies, including Dell, CSC and HP.

Rating: Promising

CSC is the third-largest worldwide IT management (outsourcing) company, behind IBM and HP. Gartner estimates storage-related service accounted for more than $2 billion of the company's 2009 revenue. CSC has shifted from a geographic and line-of-business orientation to a vertical industry orientation. This change was made to provide more industry-specific local expertise to our customers, with service delivery supported by global resources and alliance partners. Outsourcing services are managed through three distinct portfolios: Managed Network Services; Application Services, and Platform & End User Services. Storage is part of Platform & End User Services.

From a storage infrastructure standpoint, CSC maintains strategic relationships with EMC, Hitachi Data Systems, IBM, NetApp, Brocade, Cisco and Symantec. CSC claims that during the past year, the amount of storage it manages has increased 35%. The majority of storage service revenue is derived from managed operations, although the company has developed limited assessment services to provide current information and make independent recommendations on how to improve business performance and agility .Implementation services are usually provided in conjunction with managed services. Hardware and software support are outsourced.

CSC has temporarily dropped plans to build a low-cost alternative tier of cloud storage based on EMC Atmos. However, several other cloud initiatives have been launched, including a virtual laboratory in Chicago that is based on Skytap and NAS storage. As part of CSC's trusted cloud strategy, CSC is globally developing cloud services across the IaaS and platform as a service (PaaS) environment.

Rating: Positive

Dell's product family spans its low-end PowerVault line, midrange EMC CLARiiON and Internet Small Computer System Interface (iSCSI) storage products through its 2008 acquisition of EqualLogic. The acquisition expanded Dell's storage service staff by 158%. On 16 August 2010, Dell announced that it would acquire storage vendor 3PAR by the end of the year. Dell executives said that they anticipate no change to 3PAR customer support in the near term.

Gartner estimates that Dell's 2008 storage service revenue approached $739 million, giving it 2.7% of the storage service market.

In late 2009, Dell acquired outsourcer Perot Systems, giving the company a range of storage outsourcing and managed services that it had previously lacked. The addition of Perot formed Dell Services, a new business unit reporting directly to Michael Dell.

In early 2009, Dell reorganized globally around three major customer segments: large enterprise, public sector, and small and midsize businesses. The Dell Services organization aligns with those three business units and is responsible for creating and delivering services specific to them. The Dell Services portfolio includes Applications, Business Process, Consulting, Infrastructure and Support services. Managed services include residencies, partnered services for remote backup administration, remote data and infrastructure management, including storage.

Dell claims that the majority of 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, and GlassHouse Technologies for consulting and managed services. EMC is a major resource for services related to Dell-branded CLARiiON arrays, and EMC and Dell have reciprocal agreements for access to professional services delivery personnel.

Rating: Positive

Until 2008, EMC was the second-largest storage service provider, trailing only IBM, until HP acquired EDS. Today, EMC is the market leader for controller-based storage systems and the third-largest storage service provider worldwide. EMC storage services are segmented into professional services (a major EMC focus area) and customer support, with a total service head count of nearly 14,000 people. EMC Consulting services are now aligned by vertical industries and span Enterprise Information Management and Analytics, Application Architecture Design and Development, Application Infrastructure, Cloud and Virtual Data Center Infrastructure, and Security and Risk Management. Storage professional services are primarily delivered through the Global Services organization. Professional services capabilities are strongest in North America somewhat less strong in Europe and less strong in Asia/Pacific, where the company utilizes service delivery partners extensively.

Gartner estimates EMC's customer service organization at approximately 6,000 people. 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. EMC utilizes a "blended" virtual service delivery model incorporating both on-site and remote resources. EMC considers customer support an investment (that is, "cost") center with no profitability goals.

EMC's primary eSupport tool, Powerlink, had fallen behind tools from many competitors and had received numerous customer complaints regarding ease of use. Addressing this issue, EMC hired a vice president of eSupport in 2010 and continues to invest in this area.

In late 2009, EMC, Cisco and VMware formed the VCE coalition with a separate service joint venture (Acadia). The charter of the coalition is to help customers build and manage virtual data centers.

During the 2009 EMC World conference, the company announced a public cloud storage offering, Atmos Online. During the same conference in 2010, the company announced it would pull Atmos Online as a public cloud storage offering. The move was made to prevent channel conflicts.

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 EMEA. Services account for nearly 22% of the company's overall revenue. The company's goal is to have services and software account for 55% of overall revenue.

Hitachi Data Systems' product portfolio includes high-end and midrange arrays, as well as a platform for small businesses and NAS storage from BlueArc. Hitachi Data Systems' 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, repairs and upgrades. While this is positive in and of itself, limited interaction with customer support professionals frequently means that Hitachi Data Systems customers interviewed by Gartner 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 teams into a single organization to develop and deliver service solutions. In 2010, the Hitachi Data Systems Global Services senior vice president was named to the company's Executive Committee, demonstrating the growing value the company places on storage services.

Until recently, Hitachi Data Systems' professional services focused almost exclusively on services related to its product sets, including assessments, implementation services and consulting. During the past two years, 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 it announced new managed services in 2009. The company now claims that managed service adoption is growing 25% to 30% per quarter. Other Hitachi Data Systems services are delivered through a network of service partners, including CSC, GlassHouse Technologies, IBM and Hitachi Consulting. In particular, the Hitachi Data Systems Global Services is now more tightly integrated with Hitachi Consulting than anytime in years past, giving the two organizations the opportunity to leverage each other's capabilities and sales opportunities.

Rating: Positive

HP is the world's largest infrastructure support and hardware service company, and with the 2008 acquisition of EDS (renamed HP Enterprise Services), it is the world's second-largest outsourcer behind IBM. Services now 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 Enterprise Business (EB) unit, which encompasses Enterprise Storage and Servers, HP Software & Solutions, Technology Services and Enterprise Services. In 2008, HP dissolved its Consulting and Integration service organization and integrated the professional services capabilities across EB. 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 even-stronger multivendor capabilities, including support for mainframe storage management, the integration of the two companies is still in progress. In February 2010, an internal HP service executive took the reins as senior vice president of Enterprise Services. Four months later, HP announced plans to cut 9,000 jobs as it restructures its Enterprise Services business and automates the services it offers enterprise customers. Gartner believes the restructuring and job cuts will primarily affect the Enterprise Services organization. However, the impact on storage services is unclear at this time. HP asserts that few of these cuts will affect storage service delivery personnel.

Rating: Positive

With more than 23% of the storage service market, IBM is the worldwide storage service market share leader, albeit in a smaller overall market due to the recession of 2008 and 2009. The company also has an enormous worldwide presence, with 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.

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. As with HP, IBM is a major provider of multivendor support services — largely a product of its outsourcing business in which 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).

A major thrust for IBM in 2010 and beyond is cloud computing combined with cloud storage. To date, IBM's cloud storage services have been related to helping customers plan and implement private clouds — generally based on file services associated with the IBM Scale Out Network Attached Storage (SONAS) appliance. Later in 2010, Gartner anticipates that IBM will announce its own public storage cloud. As well as making the capacity available to enterprise customers, IBM will leverage its public cloud for many of its SaaS offerings and also make it available as a lower-cost alternative tier of storage to applicable data workloads. In 2010, IBM also began incorporating its storage consulting and related services into storage offerings for outsourcing customers.

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. This added hundreds of new partners to the extended field, with the intention of allowing NetApp's direct professional services experts to focus on the needs of enterprise customers while servicing all others through authorized partners. In 2010, planning and organization for this approach is largely in place for developing specific services for partner delivery, training partners and assuring service quality and consistency worldwide. As part of the program, NetApp is making its service delivery partners available to channel partners to deliver certain services on the reseller's behalf. NetApp plans to deliver most professional services directly to 125 major accounts, together with partners in 1,500 named accounts and totally through partners in all others. Currently, 70% of NetApp's hardware revenue is generated through resellers. NetApp's Promising rating is largely based on the company's new strategy of heavily leveraging the channel for professional services delivery. While the company appears to have training, tools, processes and service quality monitoring capabilities in place, only successful execution and customer acceptance will prove the wisdom of this new strategy.

NetApp offers two customer support offerings — SupportEdge Premium and SupportEdge Standard — as well as a secure support offering for government agencies. NetApp leverages authorized service providers for low-complexity, low-priority casework, such as disk replacements. This allows NetApp to rapidly direct more-complex cases to NetApp centers in which they can immediately access NetApp specialists as needed. While almost all on-site hardware replacement is delivered by IBM, on-site troubleshooting and escalations are handled by NetApp field engineers.

Gartner had long considered NetApp among the market leaders for storage eSupport tools and support and serviceability engineering, but challengers have recently invested heavily in these tools and have caught up. NetApp is vowing to regain leadership in this area, revamping its customer support site and making it more intuitive and integrated into the company’s CRM systems. The revamp will also allow NetApp to better leverage its "AutoSupport" capabilities in the area of predictive support, helping customers identify and self-correct faults prior to an incident.

Rating: Promising

In April 2009, Oracle announced its intention to acquire Sun Microsystems, and the deal was finalized in January 2010. The disk and storage software products continue to be branded as Sun. Oracle storage products consist of several product families, with some midrange arrays resold from LSI. It also markets tape products under the StorageTek brand, which Sun acquired through the 2005 StorageTek acquisition. Gartner estimates Oracle storage service revenue at $1.5 billion, making the company the fourth-largest service provider among storage OEMs.

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

Oracle Advanced Customer Services are focused on IT architecture, technical consulting, technical assessments, migration services and IT service management processes. Under its Ecosystem Support Program, Oracle collaboratively supports products from more than 100 providers. It operates support centers with SAP and Symantec, and although Oracle has maintained its current multivendor capabilities and continues to deliver these services, the future is unclear as to the degree to which the database giant will permit continued support for competitive database products.

Until the Oracle acquisition, Sun had three basic levels of support: silver, gold and platinum. But the company also made myriad of hardware and software support options available, including time-and-materials support, site maintenance options, as well as custom support options and third-party maintenance. Almost immediately after finalizing the Sun acquisition, Oracle made some major decisions regarding Sun services, particularly in terms of hardware and software support. Oracle determined to focus primarily on the Oracle stack, and although the company provides multivendor support today, Oracle is not marketing it as Sun did, and Oracle sells it only where there is a strategic need and customers request it. More importantly, Oracle pared the Sun support choices to a single mission-critical same-day on-site offering priced at 12% of the net hardware and software purchase price (8%, if there's software-only support).

Key features of the offering include:

• Sun's tiered model has been replaced with Oracle Premier Support for Systems and Oracle Premier Support for Operating Systems.

• Oracle Premier Support for Operating Systems is 8% of the hardware purchase price, and it covers Solaris, Oracle Enterprise Linux and Oracle VM on Sun hardware.

• Oracle Premier Support for Systems is 12% of the hardware purchase price, and it covers the selected Oracle operating system, hardware support, replacement parts and a two-hour on-site SLA within 25 miles of an Oracle service center.

• Oracle hardware includes a standard one-year parts warranty that is unrelated to these offerings. There is no extended warranty, because Oracle expects customers to take advantage of Oracle Premier Support for Systems.

While this lone offering provides excellent value to customers requiring this level of mission-critical response, it can be overkill for customers with non-mission-critical IT infrastructure and who are content with next business day or even time-and-materials maintenance options. As a consequence, some Sun customers have reported hardware maintenance costs increasing fivefold or more. In essence, in the current economic situation, when many enterprises are seeking lower-cost hardware maintenance alternatives, Oracle has eliminated choices. Oracle, however, claims that these changes impact only a small percentage of its hardware maintenance customers and says that it will continue to honor maintenance contracts previously negotiated by Sun.

Rating: Promising

Although Unisys is still technically a hardware company, about 90% of its 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 the 2008 Unisys revenue derived through storage-related services at $503 million, down almost 6% from the company's 2008 storage service revenue, but it is reflective of the overall economic downturn of 2009. The company has a worldwide presence in 100 countries, although 77% of revenue is generated in North America and Europe.

As well as 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.

Rating: Promising