Microsoft targets storage market

If you thought Microsoft's ambitions to control the desktop, the web and the enterprise were enough for it to be getting on with, you were wrong. Watch out for its push into storage in the near future.

The first indicator of the company's intentions - the appointment late last year of Bob Muglia as senior vice president for its newly formed Enterprise Storage Services Group - went almost unnoticed.

But last week group vice president Jim Allchin indicated in an interview that Microsoft would be looking to produce software that undercuts rivals in the enterprise market.

The Redmond giant is a past master at entering a software market with products that undercut competitors, for instance with SQL Server for enterprise database management. Nor is any area of storage likely to escape Microsoft's scrutiny.

The Enterprise Storage Services Group is tasked with developing a strategy to evolve Microsoft's file systems and, more ominously for the likes of IBM, EMC and Compaq, develop storage area networks, network attached storage, backup, continuous availability and 'storage resource management', which could include storage virtualisation.

"It is not so surprising as other general vendors such as IBM and Compaq have gone into storage," said Sue Clarke, senior research analyst specialising in data management at Butler Group. "Companies are cutting back in other areas but storage is extremely lucrative right now."

In recent years storage systems have relied more and more on complex software to control high-performance, but increasingly commoditised, hardware.

Clarke explained that most large vendors move into a new area by buying the technology. "It will be interesting to see how Microsoft achieves this: by internal development or acquisition," she said.

Right now IBM and storage market leader EMC have partnership agreements with Microsoft for storage systems. But as a storage specialist EMC looks most vulnerable to a price attack in the long term. Other major vendors such as Sun Microsystems and Compaq are already attacking its market.

Storage management software could be embedded into a future operating system release or make use of Microsoft's SQL Server database. But either way, analysts do not expect any major product releases within the next two years.

According to IDC, storage software generated $5.6bn in 2001 and will rise to $9bn by 2004.