Article

Tape sales up as IT spending improves

Jo Maitland, Senior Executive Editor

Tape products are flying off the shelves these days as companies free up IT budgets and begin to fall in line with new regulations governing record retention.

IBM, StorageTek and Imation have all reported solid quarterly earnings in the past week, citing tape sales as a significant contribution to overall revenues.

StorageTek's total tape revenue increased 3% year over year to $223 million or nearly 76% of sales. Its quarterly tape revenue was actually down a fraction sequentially, which StorageTek attributes to customers waiting on its new high-end tape library, the SL8500, expected later this year.

"There's good growth in the enterprise market as IT managers hit the wall in being creative and now have to invest in more gear," says Scott McClure, product manager at StorageTek. He says new tape products including the IBM 3592 and StorageTek's T9940B have been big sellers recently. IBM officials also cite strong LTO sales as strong drivers. McClure says there's a lot of interest in compliance, but it's not driving significant volumes yet.

Bob Abraham, President of Freeman Reports, says the momentum in tape sales indicates that the tape market is growing, despite dire predictions from disk-only vendors such as EMC, who have been saying for years that "tape is dead". Abraham says that users are choosing tape primarily for its low cost. "There's all this razzle-dazzle about disk-to-disk backup but it's not the answer for long-term storage because

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of the raw economics; The best disk-to-disk offering costs five times more per gigabyte than tape and this gap never closes," he says.

A soon-to-be-published study by our sister publication, Storage, suggests the picture may be more complex. The study, based on a survey of 635 storage managers, shows that less than 40% of these managers are increasing their spending on tape for backup, while half are increasing spending on disk-based backup. The study also supports the view that tape remains the leading choice for long-term storage, including compliance records (for more details on the survey see the May issue of Storage).

Charlie Andrews, director of tape marketing at IBM says there are certain applications where tape will always be in use. "In all the scenarios for disaster recovery, tape is a key component as it is the only removable media and is still the lowest cost option," he says.

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