1. STORAGE ARCHITECTURE/ MASTER: The Adoption of Intelligence in the Fabric End Users Speak Out Nancy Hurley Senior Analyst Enterprise Strategy Group

2. Research objectives Are end users interested in the prospect of network-based storage intelligence? Which specific storage services will move to the network? When? In what order? On what platforms do users want intelligent storage network solutions delivered? From whom will users buy intelligent storage network solutions ?

3. Research methodology Quantitative research : Online survey conducted in late April/early May 2004 Storage professionals and IT managers at US and Canadian private and public sector organizations To qualify, respondents had to make or influence storage networking purchasing decisions Two sets of questions: One for organizations with an intelligent storage network solution, another for those without 422 total responses Final sample: 210 qualified surveys (45 with intelligent storage network, 165 without) Secondary survey: 100 qualified surveys (34 with intelligent storage network)

4. Qualitative research: In-depth telephone interviews with storage professionals from enterprise and SMB organizations Mix of users with and without intelligent storage network solutions

5. Overall findings Early adopters see significant benefits Cost reductions Ease management burden Early Adopters intend to move more services into the fabric General market shows significant interest in adoption -- question is, when?

6. Profile of early adopters Compared to the general market, early adopters have: Higher annual revenue Bigger storage budgets Higher storage capacities More SANs More data on the SAN Higher SAN port count More multi-site SANs

8. End user quotes “The primary reason we went with an intelligent storage network solution was that we didn’t want to be dependent on any one hardware vendor. I want the flexibility and economic benefits of a heterogeneous infrastructure.”

9. End user quotes (2) “To me, intelligence in the fabric revolves around virtualizing our storage environment so that we can automate everyday storage tasks like provisioning. I know that we’re not getting any more headcount so we need to move towards true policy-based storage management.”

10. Of users that have already implemented an intelligent storage network: 79% have reduced annual storage hardware spending (28% of users by 20% or more) 79% have reduced annual storage hardware spending (28% of users by 20% or more) 72% have reduced annual storage software spending (25% of users by 20% or more) 72% have reduced annual storage software spending (25% of users by 20% or more) 72% have reduced annual storage administration costs (30% of users by 20% or more) 72% have reduced annual storage administration costs (30% of users by 20% or more)

11. Respondents who have not yet deployed an intelligent storage network solution are more skeptical… 48% of those respondents believe their organization wouldn’t reduce storage hardware spending at all.

12. Disparity: Non-adopters’ expectations vs. early adopters’ results

13. Early adopters satisfaction survey

14. Early adopter satisfaction “I think we’ve saved a tremendous amount of money by deploying an intelligent network solution. I mean, I could argue that we’ve reduced our storage hardware budget by a factor of 5 or even 10! Now, I can also deploy Fibre Channel or ATA drives that are 5-10 times cheaper, and mix and match them throughout our environment depending on the class of storage required.”

15. Moving more into the fabric -- Current & planned network-based storage services: Early adopters

16. Moving more into the fabric -- Current & planned network- based storage services: Early adopters (2)

17. General market interest

18. When will we see widespread adoption? 42% who have not deployed an intelligent storage network solution say they are either “very interested” or “interested” in doing so. 6% say they will deploy a solution in the next 12 months, and another 15% within 24 months. All told, 27% already believe they will deploy at some point. Only 7% of users who don’t currently have an intelligent storage network solution say they wouldn’t consider one. 40% would consider one even though they have no plans to deploy at this time and 26% simply don’t know at this time. Significant educational opportunity/marketing challenge for vendors

19. Interest in intelligence in fabric tracks with early adopter findings

21. From whom will users buy?

22. Intelligent fabric platform preferences

23. End user purchase criteria

24. End user platform preferences Early Adopters more apt to want services at every port Non-adopters still need education; 39% did not have preference vs. 13% early adopters Expect users will employ a mix of appliances and switches Users are open to adopting from startups

25. Percent of users familiar with vendors’ “intelligent” solutions Cisco (57%)  HP (52%)  IBM (52%)  VERITAS (51%)  EMC (44%)  Brocade (28%)

26. Conclusions Vendors need to educate users on benefits Cost savings message NOT coming across Still confusion about what “intelligence” really means Anybody’s market, but switch vendors seem to have greater mindshare Believe intelligence in the fabric will see large-scale adoption in 18-24 months