Sustainable Use Of Storage Hitting Sales

Business may be looking up for 2010 in a good portion of the enterprise data storage business, following the nasty global economic downturn of 2008-09.

IT researcher Gartner reported on 3 December that worldwide external controller-based (ECB) disk storage revenue totaled more than $3.9 billion (£2.34bn) in the third quarter of 2009, a 7.3 percent decline from the same period in 2008.

So how can a decline portend better news for the industry?

“We’ve seen declines through all of this year. In fact, we were seeing double digit year-over-year declines in 2009 — 11.1 percent in Q1, and 15.7 percent in Q2,” Donna Taylor, principal research analyst for Gartner’s global Storage Quarterly Statistics program, told eWEEK.

“The year-over-year decline of 7.3 percent indicates that the economic downturn’s impact on the disk array storage market is loosening its grip. This is good news for storage vendors, because it’s the first sign of a light at the end of the tunnel,” Taylor said.

Taylor said that generally, Q4 is the strongest sales period of the year, as companies press for last-minute sales to close out on a high note.

“We have high hopes that this slowing decline will continue in Q4 and turn around [to positive numbers] by mid-2010. That’s what we’re projecting right now,” Taylor said.

In explaining the sales downturn — despite the ever-increasing amount of data in the world that needs to be stored — Taylor said that companies are trying to wring as much mileage out of their current hardware and are using improvements in software to add efficiencies that weren’t there in the past.

“They’re looking at things like thin provisioning and deduplication that allow them to do more with what they have,” Taylor said. “We’re seeing revenue realized in other areas of storage, as opposed to the disk arrays that we’re covering here. So it’s good news for companies in those areas of storage.”

EMC kept its chokehold on the No. 1 position with 26.7 percent revenue market share. EMC’s percentage is more than double that of IBM, which placed second with 13.2 percent.

Hewlett-Packard was third with 10.8 percent. Hitachi claimed 8.8 percent market share, while Dell and NetApp tied at 8.6 percent. Dell and NetApp’s revenue was separated by only $2 million.

Sun Microsystems, whose sales have slowed due to the regulatory uncertainty of its acquisition by Oracle, was seventh with 3.6 percent market share.

Gartner disk storage reports reflect hardware-only revenue, as well as hardware revenue associated with financial leases and managed services. Optional storage software revenue and storage area network infrastructure components are excluded.