Mass Storage Systems Developments and Trends

Published - Jan 2003| Analyst - Patricia Cloar| Code - IFT058A
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Report Highlights

  • The storage networking market, over the next five years, will be a primary driver of demand for storage software and services.
  • The total market for mass storage systems will see an average annual growth rate (AAGR) of 12.2% through 2007.
  • Storage services will become the single largest segment of the storage market.
  • The North American storage services market will grow at more than double the rate of hardware revenues.

INTRODUCTION

REASONS FOR THE STUDY AND ITS IMPORTANCE

MARKET FORCES

A New Asset

The information economy that emerged during the past decade produced a new perspective of data and information. Now data and the information culled from it is regarded as a critical asset. Indeed, as the marketplace has become globalized, data stores more often provide the key to an enterprise's competitive edge. Where data was previously considered just a part of an automated application system, it is now referred to as a separate strategic corporate resource.

A Bigger Bite

Heightened dependence on data in the corporate sector has elevated its importance to daily operations and productivity. As a result, a corresponding rising share of information technology (IT) budgets is being allocated to data storage, management, and protection. Mass data storage is no longer an afterthought for IT managers. Storage systems and storage technology are critical elements in a company's IT infrastructure.

Mounting Need

An outgrowth of the information economy and its greater dependence on data is a burgeoning need for gathering more data. Customer related data is particularly crucial to preserving sales growth in the fiercely competitive world marketplace. Analysis of all this data, frequently involving data mining, produces even more data that further swells corporate databases. Storage needs are creating new challenges and innovations in the mass storage industry, as well as infusing the market for storage products and services.

Availability

Making data available to employees, especially field service workers, customers, and the supply chain is gaining momentum as a requirement. Often the available data must now encompass both front and back office systems. So, market expectations for real-time continuous access to data on a 24hour/7 days a week basis is focusing management's attention on its storage system infrastructure, its availability, and reliability. New opportunities are emerging for storage industry sectors to address this data availability dilemma. This is an attractive factor in the market for both current storage industry players and potential new entrants.

TECHNOLOGY CHANGES AND ADVANCES

A New Perspective

As is typical in many high technology-based markets, storage industry manufacturers vigorously vie to lay claim to a marketing edge with the newest technology. The market is the beneficiary of this competitive strategy through three elements. In the mass storage industry, technology advancements have consistently delivered reduced cost per megabyte, increased storage capacity, and improved product performance (faster data access). Historically, the relatively high cost per megabyte for online data storage demanded a conservation approach to buying and utilizing online storage resources. Over the past decade, the cost of storage capacity has plummeted and evaporated that demand restraint in the storage market sectors. It has been replaced by a more liberal policy toward meeting corporate storage needs, and encouraged a relaxed broader view of online data access and storage. This is fuel for a storage capacity boom strengthening and vitalizing the mass storage market.

Data Generation

More sophisticated and data-intensive application systems have emerged from significant advances in processing power and performance. As a consequence, the sheer volume of data is rising rapidly, as well as the richness and level of complexity in data type. Images, audio, and video fatten file sizes. The deluge of data must not only be stored somewhere, but also requires backup and sufficient IT staff and software tools to manage it.

New technology has also unleashed its own flood of data with the establishment of an extensive network infrastructure, including the Internet, corporate Intranets and virtual private networks. Compounding the strain of handling all this data flow is an unpredictable pattern of volume growth. Thus, a reliance on electronic data to conduct both front and back office is mounting, while backup windows are shrinking amid rising levels of critical data moving across 'always on' networks. This creates a complex storage environment ripe with brand new challenges infusing the mass storage industry, elevating its prominence in IT infrastructure, and inviting evolutionary change.

EMERGING OPPORTUNITIES

Services

In many economic sectors, services are becoming a key element contributing significantly to industry revenues. Several conditions are creating just such an environment in the mass storage industry. The quick growing mountain of data to store, manage, and protect can easily overwhelm an organization's physical, financial, and IT personnel resources. Another factor is the often unpredictable growth in this data surge. Acute volume fluctuations demand more flexible storage capacity and support systems to keep networks and systems online and data available that might otherwise result in considerable revenue and productivity losses. Rising stores of critical data also mean the risk of data loss from equipment or system failure, or site disaster is now soaring to new heights. These market circumstances present profitable opportunities for entirely new and innovative storage market services. This is the case throughout the channel for the mass storage industry. It is attracting the notice of companies in other technology industries—both manufacturers and service providerseager to branch into new avenues generating healthy profit streams.

OBJECTIVES OF THE STUDY AND ITS CONTRIBUTION

The objectives of this study are intended to provide information pertinent to the industry in such depth for the report audience to sufficiently evaluate the implications of the analysis data on their future market success, as well as the future of the industry. The objectives are to:

  • Describe the mass storage industry including its dynamics, influences, inhibitors, and legal challenges.
  • Explain the technology and its application and usage in the mass storage industry including implications of emerging developments and anticipated advancements.
  • Quantify and project product and application markets.
  • Isolate industry challenges and avenues of opportunity - both current and long term.
  • Delineate how to take full advantage of identified opportunities.
  • Examine market potential across products, applications, and geographic regions plus forecast trends.
  • Assess the industry's competitive environment and strategic direction.

AUDIENCE FOR THE REPORT

Market opportunities have emerged and will gain momentum for a number of broad groups. These groups, which are most appropriate as the direct audience of this report, are:

  • Manufacturers and vendors in the mass storage industry including storage media companies;
  • Value Added Resellers (VARs) and system integrators;
  • Computer industry-related consultants (solution providers);
  • Outsourcing computer-related services;
  • Software developers;
  • Distributors and suppliers of computer equipment and supplies;
  • Manufacturers and vendors in the networking and telecommunications industries;
  • Technology related training and educational services;
  • Technical and vocational schools;
  • Corporate MIS managers and CIOs;
  • Internet service providers;
  • Investors in information technology.

SCOPE AND CONTENT OF REPORT

A separate comprehensive analysis and forecast is devoted to the market for each of the leading mass storage industry revenue stream areas - hardware, software, and services. Coverage of market projections encompasses a 5-year period from 2002 through 2007. Market data for years 1999, 2000, and 2001 is also included with selected projections for comparative purposes. Product market value projections are addressed both on the basis of major product category and the four major regional markets of the world: North America, Europe, Pacific Asia, and Rest of the World. An examination of world market values for the entire industry concludes the product category presentation to provide an inclusive picture and extensive market forecast.

Additional market intelligence is supplied from the analysis of mass storage application markets. Five-year revenue forecasts for each market application present contribution values by region, as well as by major mass storage product market areas. An examination of the world mass storage market by leading market application provides a more comprehensive picture to conclude the market application presentation. An industry structure discussion furnishes strategic market information on major market players, channel trends, market drivers, opportunities for growth, and challenges to market expansion. An assessment of the competitive environment is included as part of the analysis of each product market.

The technologies of the mass storage industry are explained, including their projected contribution value to the market. Salient technology issues and trends are explored in relation to standards, product development, and market opportunities and barriers. Profiles of key industry participants are also chronicled in the report contents. An appendix supplements the study by supplying a database of industry-related organizations and industry publications.

METHODOLOGY AND INFORMATION SOURCES

The forecast data are based on analysis of information from government, industry-related associations and organizations, technology trends, financial sources, secondary sources, and primary research from industry sources. Industry sources included manufacturers and suppliers of mass storage equipment and devices, software developers, industry service providers, distributors, systems integrators, resellers, and commercial users.

ANALYST CREDENTIALS

The report analyst has been involved with the information technology industry for over 20 years. That experience spans mainframe multi-site environments down to small client/server installations and home offices. The analyst's credentials also include a Bachelor of Science degree in marketing and a Master of Administration degree.

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