As the storage market gets bigger and standardisation sets in, many of the industry's pioneers risk being displaced by new entrants using consumer marketing techniques to commoditise products which were once seen as being specialised solutions. As we've seen in other markets, commoditization increases the size of the market by lowering prices for end users and making solutions affordable to more people (CDs being just one example), but along the way strong competition and learning curve pricing tactics mean that few vendors will make any profit.

One doomsday scenario for the storage market is that it will segment into about a dozen companies.

In this vision there will be one major company which dominates each major segment:- portable systems, desktop, and rackmount systems. Within each segment the market leader will have a dominant market share, and their competitors will have to fight it out for small niches such as higher performance, ruggedisation, or style factors like color...

Another view is that it will be like the PC market, with thousands of small manufacturers and a handful of big ones, and almost no one making any money.

You might ask the question:- How can you differentiate a storage appliance and make your product unique? (while being compatible with every relevant standard) and at the same time persuade a customer that it's worth spending more money on your box rather than Brand X which is 10% cheaper this week?

The answer to that lies in software and customer service.

Let's fast forward to 2004.

I want to buy a home entertainment system which will replace my current household mish-mash collection of Dell PC (through which I currently watch satellite TV, videos and DVD, and which has better speakers than my so called "hi-fi"). The new system also has to replace or work with various generations of Sony gadgets and MP3 players...

I'm busy and don't have much time, so I go to the web site of the Rodent Consumer Storage Box Company which lets me select whatever movies and music I want factory preloaded onto the box when I get it.

Click - maybe individual selections from the current top 100 DVDs and CDs - or maybe just an entire group like Arnold Schwarzenneger movies since Conan The Barbarian, or just a set of Andrew Lloyd Webber musicals. I'm running out of space to store individual CDs and books and DVDs in my house, and one day I'd like to reclaim my garage, so if I can buy a preloaded collection at a web discounted price of 50% then I probably won't bother looking for my favourite CD in my car, or my wife's car, or the office. I'll just click to get another copy on the new system. After a few clicks on the shopping trolley, I realise that the price of the 1 terabyte home entertainment storage box is just a small part of my total order. But then I think of all the money I saved by waiting another year before buying my plasma TV monitor, and hey, the recession ended last year... so what the heck!

Now you may think this is a little far fetched. And if you're the kind of person who buys PCs today without the operating system pre-installed, then this may not be for you. But think about the advantages for the rest of us...

• the box company gains because their adverage selling price is 2 to 3 times higher than just the hardware on its own

• the software companies gain because selling factory installed software reduces their losses from piracy, and has very little incremental cost

• the customer gains, because they get most of what they really need in one go, and don't need to waste any time shopping around or installing software.

The same goes for NAS, SAN and other storage systems. In fact, if your company's backup is via iSCSI - you should probably be able to buy your new storage systems with your company data and applications already preloaded...The company which lets you do that first - will have all your attention.

A future in which diverse storage companies thrive while saving their customers money is indeed possible. The lowest cost hardware box may not be the winner in this particular race, if the marketing department can get their act together in time. This may even be a a good time to talk up that dotcom experience in your resumé. And as for the terabyte storage box in the home? Well maybe 2004 is a little too early, but it's coming..