Netgear tries to kill off local storage with its networked media servers (video)

Consumers are collecting a lot of media these days. And that’s fueling the need for media servers, which back your data up to a network storage device and let you access it from just about anywhere. Among the companies leading the charge for these media servers is Netgear, which tonight launched the latest models of its ReadyNAS Ultra media storage servers.

Patrick Lo, chief executive of San Jose, Calif.-based Netgear (pictured above), said network-attached storage (NAS) devices that were once used only in data centers are now making their way into small businesses and even homes. The benefits of these network devices — dubbed the digital brain for the connected home — are so plentiful that they might kill off local storage, Netgear contends.

That contention — that we might not need stand-alone hard drives on our computers — is a little far-fetched for now. But networked storage devices are great for worry-free backup, sharing, or archiving all of your important data. And the devices now pack so much storage in a small box that you can fit a whole media library on them. These devices are aimed at “prosumers,” or high-end consumers who watch, shoot or store a ton of video, photos, and music. As a case in point, Lo says he has about 300 hours of video stored on his home machines. That means he needs two of the six-terabyte ReadyNAS Ultra 6 Plus devices to store his data.

Lo estimates that the market today is  about $500 million in sales. Netgear, which generated $687 million in revenue last year and is on track to do $850 million this year (mainly from its home connectivity, home networking, and storage businesses) has become a big player in network storage in the past three years. With the newest ReadyNAS Ultra family (with two, four or six drives each), Netgear has most of the market covered from low-end consumer to high-end consumer and small businesses.

These devices have grown up since they were introduced as backup drives. Now they have a lot of smarts built into them and are much easier to use. They work with Tivo digital video recorders, backing up your TV shows. They include Orb software, which “transcodes” data, allowing you to access and share data stored on your home media servers from any other internet-connected devices, including mobile phones. Memeo software lets you easily back up and restore data. And they have Skifta “media shifting” software, which allows you to play your home media on any device. All of these software applications are built into the storage devices.

The storage systems cost less than they used to, in part because they use low-cost Intel Atom processors instead of Netgear’s own custom chips, which were used in previous models, said Lo. Rivals in home storage servers include Western Digital, Iomega, and Seagate.

Rob Enderle, analyst at Enderle Research, says that network-attached storage is getting much more popular and easier to use, but it will ultimately face competition from cloud-based solutions such as Carbonite. Whereas Netgear’s boxes store data in your home, the cloud storage stores it all in a data center. The advantage for that is that it can be retrieved even if your home burns down. But cloud-based storage still faces challenges in performance and capacity. The prices are as follows: with no disks, the Netgear ReadyNAS Ultra 4 sells for $599. With two 2-terabyte drives, it sells for $8.99. The Netgear ReadyNAS Ultra 6 sells for $899 without disks and $1,349 with three 2-terabyte drives. The products are available for pre-order on Amazon.com and will ship in mid-July. A smaller Ultra 2 device will ship in October. Check out our video interview with Ho below:

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