While iSCSI shouldn't change FC strategies for users any time soon, suppliers need to start placing bets today. iSCSI significantly increases the market for SAN, especially SAN management software which now becomes economically feasible for small and medium business users. Suppliers are looking at a substantial opportunity to develop low cost management solutions riding on top of the iSCSI wave where simple, cheap and automated are becoming the defining attributes in the market space.
Vendors should not ignore iSCSI, especially given Microsoft support for the standard. Rather suppliers should develop 'everything included' and true out-of-the-box iSCSI products bundling management software with hardware as turnkey solutions. As the market explodes, this will put serious pressure on the high end to respond, especially as it relates to SAN software, which continues to increase as a percentage of overall storage acquisition costs.
For established vendors like Dell, HP, NetApp and newer players such as EqualLogic and LeftHand Networks, this becomes a game of distribution channels, bundled software function and simplicity of solution all aimed at commoditizing the pricing umbrella set by the likes of EMC, HDS, IBM and Symantec. Vendors ignoring iSCSI and focusing only on Fibre Channel solutions risk substantial margin pressure down the road.
Action Item: iSCSI is a multi-year trend that necessitates serious planning today on the part of vendors. Storage and storage software companies need to develop volume strategies and prepare for the coming iSCSI onslaught. Sacrificing some near-term margin to get in the game is always a hard choice but in this case it may be the right one.
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