Host-Bus RAID Controller Worldwide Market Share, 2002 (Executive Summary) Executive Summary Publication Date: 23 July 2003
Author Roger W. Cox This document has been published to the following Marketplace codes: HARD-WW-EX-0407 For More Information... In North America and Latin America: +1-203-316-1111 In Europe, the Middle East and Africa: +44 1784 267770 In Asia/Pacific: +61-7-3405-2582 In Japan: +81-3-3481-3670 Worldwide via gartner.com: www.gartner.com Entire contents 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice. 116244
Host Bus RAID Controller Worldwide Market Share, 2002 (Executive Summary) Overview Further vendor consolidation, continued host bus Small Computer Systems Interface (SCSI) redundant array of inexpensive disks (RAID) controller unit contraction, strong host bus Advanced Technology Attachment (ATA) RAID controller unit growth and unstirring factory revenue results represent the fundamental characteristics of the host bus RAID controller market in 2002. The "Host Bus RAID Controller Worldwide Market Share, 2002" report presents comprehensive market share data for 1998 through 2002 from an enabling vendor point of view rather than from a server or storage system perspective. An enabling vendor designs and manufactures host bus RAID controllers for integration into server and storage platforms. Gartner Dataquest segments enabling vendors into two categories. As captive enabling vendors, Hewlett Packard and IBM represent the first category. In 2002, as in the past, HP's industry standard server division produced host bus SCSI RAID controllers used with its ProLiant servers and selected storage platforms. Likewise, until IBM executed its licensing and original equipment manufactering (OEM) agreement with Adaptec, IBM produced host bus SCSI RAID controllers used with its xseries servers. The second category comprises third-party enabling vendors that design, manufacture and sell host bus RAID controllers for integration into server and storage platforms manufactured by other vendors. The five leading third-party enabling host bus RAID controller vendors in 2002 were Promise Technology, Adaptec, LSI Logic, Mylex (a wholly owned IBM subsidiary) and Intel/ICP Vortex. In addition to the five leading third-party enabling vendors, other third-party enabling host bus RAID controller vendors, including 3Ware and HighPoint, are attempting to penetrate the ATA segment of the host bus RAID controller market. Detailed tables regarding share by enabling vendor, geographic region, form factor, disk drive protocol, number of SCSI channels, number of ATA ports and saleschannelsarecontainedinthereport.figure1shows2002hostbusraid controller unit market share by enabling vendor. 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 1
2 Host-Bus RAID Controller Worldwide Market Share, 2002 (Executive Summary) Figure 1 2002 Host Bus RAID Controller Unit Market Share by Enabling Vendor Intel/ICP vortex (3%) Others (2%) Mylex (3%) LSI Logic (13%) Promise (31%) Adaptec (18%) Total 2002 Units = 3,493,948 Hewlett-Packard and IBM (30%) 116244-00-01 Source: Gartner Dataquest (June 2003) Vendor Consolidation Gartner Dataquest believes consolidation signals the maturation of the host bus RAID controller market. While host bus RAID controllers remain an important technology, they no longer provide significant competitive differentiation, thereby, diminishing their strategic value. Moreover, once considered a growth market, third-party revenue has steadily fallen since 1999. Gartner Dataquest expects this trend to continue. In light of these circumstances, IBM and Intel chose to exit the development of host bus RAID controller add-in cards, reducing the number of third-party host bus SCSI RAID controller add-in card enabling vendors to essentially Adaptec and LSI Logic. In March 2002, IBM and Adaptec consummated a licensing and OEM agreement whereby Adaptec will sustain and produce IBM's ServeRAID controller for the IBM xseries server. The contract also allows Adaptec to use ServeRAID technology in its host bus RAID and external RAID products. This relationship is now followed by the June 2003 announcement that Adaptec has acquired ICP vortex Computersysteme from Intel. (Since March 2001, ICP vortex has been an indirect wholly owned subsidiary of Intel. Previous to Intel'spurchaseofICPvortex,ICPvortexwasaprivatelyheldfirm headquartered in Neckarsulm, Germany, with noteworthy technology and an established host bus RAID controller business in the European market.) Before the above transactions, Adaptec had largely built its host bus RAID controller business by purchasing Distributed Processing Technology in November 1999 and Data Kinesis in 1996.
Host Bus RAID Controller Worldwide Market Share, 2002 (Executive Summary) 3 Host Bus SCSI RAID Controllers LSI Logic further expanded its host bus RAID controller product portfolio in September2002bybuyingfromIBMcertainintellectualpropertyandother assets associated with Mylex's host bus RAID controller business. (Before this exchange, Mylex had been a wholly owned IBM subsidiary since July 1999. Before being bought by IBM, Mylex was a publicly held firm that pioneered host bus SCSI RAID controller technology and had established a leading position in the host bus SCSI RAID controller market.) LSI Logic entered the host bus RAID controller business with its May 2001 acquisition of American Megatrends' MegaRAID software intellectual property and host adapter board business. Gartner Dataquest presumes these new vendor alignments will not stifle future innovation or noticeably change the competitive environment. Adaptec and LSI Logic will continue to vigorously compete for the available business. That said, Gartner Dataquest believes these accords will result in the following benefits to the involved companies. Adaptec and LSI Logic are broadening their respective storage component product offerings and market coverage. Both will realize accretive revenue. As the two leading providers of SCSI controllers, they have augmented the number of platforms using their core SCSI technology. By shedding ICP vortex, Intel may concentrate its R&D activities on advancing the development of Input Output Processors (IOP), Serial Advanced Technology Attachment (SATA), and Serial Attached SCSI (SAS) components. In 2002, 74.5 percent of the host bus SCSI RAID controller add-in cards used Intel's IOP as the RAID engine of choice. With the sale of Mylex to LSI Logic, IBM eliminates a small operational nuisance that did not live up to original expectations or provide any significant strategic value to its microelectronics business. IBM's licensing and OEM arrangement with Adaptec is considered by Gartner Dataquest to be the most profound of the above transactions. It clearly supports the case that host bus RAID controllers are no longer deemed to be strategic technology. In view of HP's ongoing scrutiny of operational expense in its Enterprise Systems Group, it is not unreasonable to predict that HP may follow a path similar to that of IBM, outsourcing its SmartArray technology to Adaptec or LSI Logic. The host bus RAID controller market associated with the SCSI disk drive protocol continues to weaken and experience dramatic change in form factor design. In 2002, host bus SCSI RAID controller add-in card units fell 9.4 percent, following a drop of 13.3 percent in 2001. On the other hand, low-cost SCSI-based RAID on a chip (ROC) and RAID on a motherboard (ROMB) units increased 15.5 percent in 2002 on top of a 17.7 percent gain in 2001. Since 2000, the combination of these two form factors results in a 2 percent decline in host bus RAID controller units that support SCSI disk drives. Beyond the influence of a soft worldwide economy and disruptive geopolitical events, there are three underlying reasons explaining the downturn in host bus SCSI RAID controller units. First, host-based storage is increasingly migrating to external controller-based fabric-attached storage (FAS). Second, the emergence of rack-dense and blade server form factors are reducing the number of internal disk drives housed within the server enclosure. Third, host bus RAID controllers that support low-cost ATA disk drives continue to resonate in the Intel Architecture (IA) powered workstation and sub-$5,000 IA server markets.
4 Host-Bus RAID Controller Worldwide Market Share, 2002 (Executive Summary) Host Bus ATA RAID Controllers Host bus ATA RAID controllers continue to attain pronounced traction. All host bus ATA RAID controllers are currently deployed in IA-powered desktops, workstations, sub-$5,000 servers and network-attached storage (NAS) platforms. The growing acceptance of host bus ATA RAID controllers is primarily attributable to the compelling cost/capacity value proposition associated with ATA disk drives. Host bus ATA RAID controller add-in cards powered by an IOP are more than fully capable of satisfying the reliability and performance requirements in the sub-$5,000 IA server market. As the number of internal disk drives associated with IA servers continues to trend downward, and as competitive pressures force leading IA platform vendors to lower prices without sacrificing disk storage capacity, Gartner Dataquest anticipates the number of host bus ATA RAID controllers will ramp at a rate far above industry growth. Third-Party Host Bus RAID Controller Revenue by Sales Channel Even though overall host bus RAID controller units sold by third-party vendors grew a healthy 18.2 percent in 2002, third-party revenue eroded 4.3 percent. Changing product mix is responsible for this contrasting result. Led by a 65.5 percent reduction in 4- and 3-channel host bus SCSI RAID controller add-in card units, the higher-priced multichannel host bus SCSI RAID controller add-in card units decreased 20.5 percent in 2002. While SCSI-based 1-, 0-channel and ROMB units increased 18.4 percent, and ATA-based RAID controller units grew 32.2 percent in 2002, their combined unit improvement was not sufficient to offset the distinctively lower average selling price (ASP) of these technologies. Figure 2 shows the consolidated host bus RAID controller factory revenue by sales channel for third-party enabling vendors, including Adaptec, LSI Logic, Mylex, Promise Technology, Intel/ICP vortex and others. Figure 2 Third-Party Enabling Vendor Host Bus RAID Controller Factory Revenue by Sales Channel Annual Factory Revenue ($M) Year-Over-Year Change (%) 300 250 200 150 40 35 30 25 20 15 OEM Sales Channel ($M) Distribution Sales Channel ($M) Year-Over-Year Change (%) 100 10 5 50 0-5 0 1998 1999 2000 2001 2002-10 116244-00-02 Source: Gartner Dataquest (June 2003)
Host Bus RAID Controller Worldwide Market Share, 2002 (Executive Summary) 5 For the full report, see "Host Bus RAID Controller Worldwide Market Share, 2002," HWST-WW-MS-0149.