The most sobering insights from The 451 Storage Executive Event and The Gartner Data Center Summit at the end of 2010 came from talking to enterprise end users about IT budgets, managing legacy systems and adopting new lower cost architectures across the enterprise. The majority of IT administrators are dealing with the brutal combination of increased senior management expectations with IT budgets that are often flat at best and sometimes declining. Senior executives are pushing IT leaders to reach new service levels with the same level of funding. There are few Greenfield areas and innovation in Brownfield areas presents a host of challenges.
Where there is enterprise IT pain there is certainly opportunity for disruption by new entrants. Start-ups coming at this market are targeting legacy systems with historically high margins and are providing both Capex and Opex relief in many cases. However, the incumbents are not going away any time soon and are ferociously defending their legacy territory. We see the most near term disruption coming in Tier 2 and 3 storage environments with Tier 1 remaining the home turf of the incumbents for the foreseeable future.