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SANs Fundamentals

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SAN Market Demand and Projections by Region and Country

Japanese businesses, buffeted by a decade of economic anemia and suffused with the conservatism that permeates IT investment strategies, are cautiously coming around to the use of SANs. But new evidence that the economy may be slipping back into recession and centralized corporate bureaucracies may dampen adoption of SANs on a large scale.

Research institutes and educational customers are early movers to SANs. Central Tokyo University is using a SAN because they have an immediate need for more storage. But currently, SAN users remain a minority in Japan, where many companies use centralized storage and backup methods such as tape drives and hard drives.

Nevertheless, according to Gartner Group's Dataquest unit, the storage market in Japan is the fastest growing market in the Asia-Pacific region, where it is projected to grow at nearly 17% per year and reach $4.2 billion by 2003. That growth is being driven by the rapid expansion of communications infrastructure throughout Japan. Japan currently has nearly 61 million wireless subscribers; and, according to Dataquest, the country is Asia's biggest Internet market with total subscribers expected to hit 64.5 million by 2004.

One touted benefit of SANs is that they give users the ability to add more storage capacity without burdening the corporate data center. But some Japanese companies view SANs as the outsourcing of key business functions and remain reluctant to make that move.

Traditionally, Japanese companies like to make centralized decisions, and so moving small parts of a business to a SAN is not always feasible. This kind of change for a company is very complex.

There are some real cultural differences in the way business decisions about IT get made, and you have to respect them. And, while another factor in the slow adoption of SANs is cost, Japanese companies are being confronted by a unique twist on the need for more storage.

First there is the double-byte issue—referring to the need for added storage when using kanji characters. Each letter of their (Roman) alphabet takes a single byte of memory, but with Japanese (and Chinese or Korean) characters, you need twice as much storage capacity.

The second driving force for SANs are Internet service providers. With the explosion of Internet usage, service providers have to offer customers around-the-clock storage and remote backup. That wasn't something companies had to think about before. Tokyo-based ASAHI Net uses a Network Appliance. SAN provided by ITFOR to serve more than 200,000 subscribers and 190 domestic access points. But, current business and technology conditions continue to slow the growth of SANs in the region.

Business spending on capital equipment, one of the bright spots in 2000, as Japanese companies scrambled to buy technology, is sagging. The government projects a 2.1% decline in capital spending for the fiscal year, following a 9.4% jump in 2001.

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