By producing blueprints for server computers and assembling most of their critical components, Intel helped generate significant production of low-end machines, often by lesser-known manufacturers. In a similar way, the company is poised to fuel the "white box" market for storage disk arrays, said David Freund, an analyst with researcher Illuminata.
"The server-commoditisation wave is being repeated in storage," Freund wrote in a recent report. "Intel is planting (its) seeds and planning to reap the rewards."
The chip giant already makes a variety of semiconductor products for storage systems. But it is now weaving its efforts into a more comprehensive whole that would reduce the independent engineering needed to make a system.
Intel is working with a partner to integrate some storage functions with processor chips, which could speed up performance and cut costs. At a trade show earlier this year, Intel demonstrated prototypes of inexpensive storage systems. Intel has invested in numerous storage-related companies. And the company has begun coordinating the work of several divisions that each touch on the storage world, said Seth Bobroff, director of marketing programs and communications for Intel's networking and storage group.
"It's absolutely a key area and one we see growing," Bobroff said. "We see the opportunity and are working as one."
Such a move, over time, could have a significant impact on the industry. Smaller PC and server makers could start to sell their own storage systems by using the fundamental engineering and design work performed by Intel. Conversely, large storage companies such as EMC could feel a pinch in their plans to target small and mid-size businesses.
Intel declined to provide figures on its storage-related revenue or its specific plans related to white box storage systems. But Bobroff hinted the company is ready to give the low end of the market a push. Intel wants to work with an "ecosystem" when it comes to storage products, he said. But, he added, if that ecosystem isn't moving, Intel asks itself, "What do we do to try to help move it along?"
Industry statistics show an increasing hunger for storage gear, thanks to factors including government regulations for retaining data and the growing digitalisation of content such as music. The amount of disk storage system capacity shipped worldwide in the first quarter of this year hit 247 petabytes, up 39.4 percent from the first quarter of 2003, according to researcher IDC. A petabyte is a million gigabytes.
Revenue for disk storage systems is growing much less quickly, as prices fall. According to IDC, total disk storage system revenue grew 3.5 percent in the first quarter, to US$5.1 billion.
Storage for the have-nots
Data storage equipment can reside within server and PC computers as well as in separate boxes full of disk drives, known as disk arrays.
Both internal and external storage systems frequently are set up using redundant array of independent disk, or RAID, technology, which allows data to be preserved even if a drive fails. Historically, storage heavyweights EMC, Hewlett-Packard, IBM and Hitachi have focused much of their attention on making high-end external arrays. These products, such as EMC's Symmetrix, connect to multiple servers for more efficient use of storage resources and improved management. But the machines, which can hold scores of terabytes and include sophisticated data-copying features, can cost hundreds of thousands of dollars.
Storage manufacturers have been paying more attention to the lower end of the market lately. Dell, which has a partnership with EMC to make and sell arrays, recently introduced a networked storage system that can hold up to 3 terabytes and has a starting price of about $5,000. Samsung, which also has a partnership with EMC, is aiming to sell storage equipment to small and mid-size businesses in Korea.
John McArthur, analyst at IDC, thinks there is a considerable market for white box makers focused on bare-bones storage arrays, especially outside the United States, in places like China. "There's a lot of units in that low-end storage space," he said. "It is not unreasonable to expect Intel to try to increase their presence in the white box market."
Aside from businesses, homes also are seen as a possible new and vast market for data storage products. With consumers storing more and more audio and video files, computer makers have begun selling equipment to hold and manage the data. Bobroff says the home storage arena is on the company's radar, and notes Intel also has a "digital home" initiative.
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