IDC: Storage Software Surges

With customers apparently more focused on protecting data than managing it, replication software sales fueled a strong growth in storage software in the second quarter, according to IDCs latest market research (see IDC Sees Market Growth ).

Overall, the storage software market totaled $2.15 billion for the quarter -- up 3.7 percent from $2.07 billion in the previous quarter and 11.8 percent from $1.92 billion in the same quarter last year.

"The storage software market continues its steady progress and pattern of double-digit growth,” says IDC analyst Rhoda Phillips. “This spending pattern reinforces IDC's expectation that storage software will post strong year-over-year growth in 2005."

Although storage resource management (SRM) remains the largest of the four storage software segments tracked by the firm, replication revenue spiked the most, followed by backup and archiving. Replication revenue grew $42 million from the previous quarter, compared to $22 million for backup/archive, and $14 million for SRM. File system software remained the smallest segment, and decreased $2 million from the previous quarter.

Replication revenue grew more than twice as much as the overall storage software market, both year-on-year and sequentially -- increasing 25.1 percent from last year and 9 percent from the previous quarter to total $509 million.Backup/archiving increased 9.6 percent year-on-year and 3.2 percent sequentially to $705 million. SRM ticked up 2.1 percent sequentially and 5.9 percent year-on-year to $711 million, and file system revenue lost 1 percent sequentially but gained 19.8 percent year-on-year to reach $174 million.

EMC Corp. (NYSE: EMC) held the overall storage software market lead with 30.6 percent, up slightly from 30.2 percent the previous quarter.

Veritas revenue declined in every category, and the company slipped in overall market share from 21.5 percent to 19.8 percent in its last quarter before becoming part of Symantec Corp. (Nasdaq: SYMC). (See Symantec, Veritas Complete Merger, Symantec & Veritas: It's a Deal, and Vulnerable Veritas.) Third-place IBM Corp. (NYSE: IBM) had the biggest growth, moving up in market share from 8.6 percent to 9.7 percent.

Table 1: Total Storage Software Revenue

In replication, EMC maintained its market lead with a 40.6 percent share, followed by Network Appliance Inc. (Nasdaq: NTAP) with 16.7 percent. Hewlett-Packard Co. (NYSE: HPQ) had the biggest sequential growth at 20.1 percent to move into a third-place tie with IBM with 8.3 percent market share. HP was at 7.8 percent and IBM at 7.6 percent in the previous quarter.Table 2: Replication Software Revenue

Veritas maintained its lead in backup and archiving, but its revenue declined 4.6 percent from the previous quarter while the market grew 3.2 percent. Overall, Veritas’s marketshare slipped from 42.4 percent to 39.2 percent. IBM moved past EMC into second place in backup and archiving with 15.5 percent to EMC’s 13.6 percent. They were tied at 13.7 percent the previous quarter. IBM revenue grew 17.1 percent sequentially compared to EMC’s 1.9 percent.

EMC led the SRM market with a 49.9 percent share, up from 46.6 percent the previous quarter. Second-place Veritas slipped from 11.9 percent to 11.1 percent share, while Computer Associates International Inc. (CA) (NYSE: CA) grew from 6.5 percent to 6.9 percent to move past HP into third. HP’s share dropped from 7.1 percent to 6.8 percent, and fifth-place IBM moved up from 5.5 percent to 6.4 percent.

Veritas also leads the file system market with 35.2 percent, but even there, its revenue declined sequentially 4.6 percent while the total market slipped 1 percent. Veritas’s share slipped from 36.6 percent to 35.2 percent, while second-place NetApp also slipped to 22.6 percent to 22 percent.

— Dave Raffo, Senior Editor, Byte and Switch0