by Paul Kunert
Services and software are expected to contribute the majority of incremental revenue in the storage market over the next five years as hardware sales are expected to be relatively lacklustre.
Research by IDC forecasts total storage market revenues in the mature European economies to reach £17.33bn this year with services and software accounting for 64 per cent of sales.
But Eric Sheppard, IDC programme manager for European storage systems research, predicts a further polarisation as IT directors juggle 60 per cent data growth rates each year with improvements in data centre manageability and efficiency.
"The growth areas will come from helping customers manage data growth and their infrastructure; the push will be to become more efficient," he told MicroScope.
Driven by complex and proliferating storage infrastructures and data management requirements including classification, archiving and DR, services are forecast by IDC to grow on a compound annual growth rate (CAGR) of 4.1 per cent, adding £1.05bn revenue between 2007 and 2011.
Software is expected to face a similar set of challenges with archiving and HSM (the fastest growing sectors) increasing the efficiency of primary systems and ticking the compliance box. CAGR of 8.9 per cent is expected to add £650m to software revenues in the next five years said the analyst.
Developments in the storage industry were merely mirroring the more mature mainstream hardware markets said Alastair Bell, managing director at Bell Microsystems: "The market knows what it wants and it’s a question of supplying the services around it."
The outlook for disk storage systems, tape automation and fibre channel switches is less rosy with respective CAGR of 1.6 per cent and declines of 7.6 per cent and 2.3 per cent potentially on the cards.
"Tape has been feeling the pinch for some time," said Sheppard. "Back-up windows are shrinking and backing up to disk gives a better performance."
He added that a decline in the number of fibre channel ports will make IP-based SAN a more viable option.
External storage is forecast to grow 4.1 per cent CAGR but internal storage may decline by nearly the same amount.
Terry Beale, EMC channel sales director, agreed with the report but felt consolidation in the data centre would buoy hardware sales and the move from DAS would create opportunities in external disk arrays. On services, he said one of the biggest markets for the channel would be helping cutomers with archiving policies.