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Storage Vendors Look East
Judging by economic figures and a flurry of news coming out of the Asia/Pacific region, storage vendors see fertile ground there for revenue growth in 2004 and beyond.
According to IDC, fourth-quarter 2003 revenue in the Asia/Pacific jumped to $544.5 million, 10.6 percent higher than the previous quarter. New storage capacity in the region grew by 38.1 percent to more than 79,000 TBytes for the entire year. IDC cites Asias recovery from an economic downturn and from SARS, plus demand for storage capacity, as reasons for the upturn in spending.
The momentum appears to be carrying over to 2004, as recent earnings reports show:
- IBM Corp.'s (NYSE: IBM) Asia/Pacific revenue grew 16 percent in the first quarter of 2004 compared to a year ago, making it Big Blues fastest growing geographic revenue stream (see IBM Profits Hit $1.6B).
- EMC Corp. (NYSE: EMC) generated $221 million in revenue from Asia/Pacific, representing a 49 percent growth from the previous year. That lagged its 62 percent growth in Europe, but still represents a substantial surge (see EMC Reports $140M Income).
- Veritas Software Corp. (Nasdaq: VRTS) revenue grew 32 percent year-over-year in Asia, according to its latest report; and
- Storage Technology Corp. (StorageTek)'s (NYSE: STK) 20 percent growth in Asia was twice its growth rate in Europe.
Executives from switch vendors Brocade Communications Systems Inc. (Nasdaq: BRCD) and McData Corp. (Nasdaq: MCDTA) both identified Asia as an emerging market for their products during calls with analysts in February. It looks like an expanding market, and we see some strength coming there, Cisco CFO Tony Canova said.
McData has aggressively attacked the region, naming an Asia general manager and country managers in China and Japan since December (see McData Names Asian GM, McData Hires China Country Manager, and McData Appoints Ishimoto in Japan). Asia/Pacific provides us with the biggest upside, if you look at it over the whole year, McData CEO John Kelley says.
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