The storage story of 2008 was growth: An accelerating explosion of information, much of it in the form of video, led IT administrators to try to make better use of their capacity and staff.

Overall demand for storage capacity is growing by about 60 percent per year, according to IDC. Another research company, Enterprise Strategy Group, pegs the annual growth rate of data between 30 percent and 60 percent.

"Organizations are having a hard time getting their arms around all that data," said ESG analyst Lauren Whitehouse. Economic woes are making it even harder, with frozen or scaled-back budgets, while the downturn isn't expected to significantly slow data growth next year.

Stuck in that bind, organizations don't want to have to roll out a gigabyte of capacity in their own data centers for every new gigabyte that's created, analysts said.

"What we'll see more of in companies is a focus on efficiency," IDC analyst Rick Villars said. They're seeking to increase the utilization of their storage capacity as well as other IT resources.

A big part of that effort is virtualization of storage, which often goes hand in hand with server virtualization and became a mainstream technology in 2008, according to analyst John Webster of Illuminata. Storage vendors are offering more virtualization products and seeing more demand for them, he said. A virtualization capability such as thin provisioning, which lets administrators assign storage capacity to a new application without having to figure out how much it ultimately will need, helps make better use of resources, Webster said.

But in addition to the trend toward disconnecting logical from physical resources, there were a handful of acquisitions this year that signaled other trends in storage world.

1. Brocade-Foundry

On Dec. 19, Brocade Communications and Foundry Networks completed a deal they had announced in July before navigating the roughest waters the financial and credit markets have seen in a generation. The merger, now valued at $2.6 billion, is intended to address a coming merger of SAN (storage area network) and LAN technology.

SAN builders have long relied on Fibre Channel, a specialized networking technology designed not to drop packets. But in most cases, the rest of the enterprise network is based on Ethernet, which is cheaper than Fibre Channel and now available at higher speeds. Maintaining both requires more adapters on storage equipment and adds to an IT department's workload. The two types of networks are headed toward gradual consolidation under the FCOE (Fiber Channel Over Ethernet) standard, which is intended to make Ethernet reliable enough for storage networks. Then, Ethernet can be the network of choice across data centers and keep getting faster.

The IDG News Service is a Network World affiliate.