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Storage margins to shrink predicts Dell

Vendors push SANs as NAS becomes commodity

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A senior Dell executive is predicting the Network Attached Storage (NAS) market is becoming commoditised in much the same way as the low-end server market.

Michael Lambert, senior vice president of Dell's Enterprise Systems Group, said that the capacity of storage devices had doubled over the course of the last year and with this products price - and margins to resellers - were falling.

This is bad news for resellers, some of which are looking to expand their business into storage, which has offered the potential for richer returns than the PC and server business, where margins have been falling for years.

Last year Dell introduced products in its PowerVault range of NAS products, which are based on a customised version of Windows 2000 Advanced Server, and executives at its Limerick factory said it intended to beef up its portfolio. Prior to this move Dell had an OEM deal that involved NAS products from Network Appliance.

NAS devices basically consist of hard disk storage devices with their own network address and operating system. NAS, which represents a way to offload storage access and management from a departmental computer, is less complex than a storage area network (SAN).

A SAN is a high-speed special-purpose network that links storage devices, commonly based on Fibre Channel, with associated data servers.

Dell believes NAS products can be dropped into a network with a minimum of installation work but admit that SAN deployments must be much more carefully tailored to the needs of individual clients.

The need for storage expertise would appear to create a need for specialist integrators but Dell controversially suggested that vendors more easily handle complex SAN deployments themselves.

When we voiced doubts about this Dell said that it wasn't the only vendor directly selling SAN kit and suggested that IBM was moving to a direct sales model for its Shark storage devices. ®

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