Storage Software Sales Post Double-Digit Gains in Q3, IDC says

Businesses continued spending on archiving, file systems, data protection and recovery, and storage management software, the research firm reports

December 10, 2008

2 Min Read
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Storage remains one of the few bright spots in a struggling economy. Research firm IDC this week reported that the worldwide storage software market had revenues of $3.1 billion in the third quarter, an increase of 11.6 percent from the same quarter a year ago. It was the 20th consecutive quarter of year-over-year growth, the firm said.

Several vendors, including Symantec Corp. (Nasdaq: SYMC), IBM Corp. (NYSE: IBM), NetApp Inc. (Nasdaq: NTAP), and Hewlett-Packard Co. (NYSE: HPQ), also posted double-digit increases in quarterly sales.

IDC last week reported that that factory revenues for worldwide external disk storage systems increased 8.8 percent year-over-year to hit $4.9 billion in the third quarter. The overall market for disk storage systems grew 1.1 percent to $6.6 billion, IDC said.

James Baker, research manager for storage software at IDC, said the strongest software product categories were archiving, file systems, data protection and recovery, and storage management. "Archiving growth can be attributed to widespread compliance and active archiving projects. File Systems are showing strength as virtualization spreads to the storage arena. Data Protection and Recovery is growing because users are aware of dire consequences to the firm if their data is not available when it is needed," he said in a statement. "And Storage Management is moving ahead as more data is put under management and improved storage efficiencies are being achieved with thin provisioning and as various Green IT projects come on line."

IDC said EMC Corp. (NYSE: EMC) was the overall market leader with a 24.7 percent share of third quarter revenue. Symantec followed with 17.8 percent, IBM was third with 12.9 percent, and NetApp finished fourth with 8.5 percent. HP and CA Inc. (Nasdaq: CA) rounded out the top 5 in what IDC called a statistical tie with 4.3 percent and 4.0 percent, respectively.More specifically, EMC had third quarter software revenue of $758 million, up 6.7 percent from a year ago; Symantec posted quarterly revenue of $545 million, up 15.3 percent; IBM had $396 million in quarterly revenue, up 12.0 percent; NetApp posted $261 million, up 14.3 percent; HP had $133 million, up 17.6 percent; and CA posted $124 million, up 4.3 percent.

The software gains in the third quarter followed a soft second quarter, which IDC attributed to the economic woes. Many storage vendors historically have a strong fourth quarter, probably because IT departments are trying to spend whatever money is left in their budgets before they get hit with budget cuts next year.

IDC tracks new license and maintenance revenues and looks at eight markets: data protection and recovery, archive and hierarchical storage management (including email archiving), storage replication, storage management, storage device management, storage infrastructure, file system, and "other".

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