One only needs to look at EMC's rash of recent acquisitions to gauge how important storage software will be in the coming years. And while the disk storage system market is only now showing signs of a rebound, International Data Corp. (IDC) says that sales of storage software are on the rise -- a trend that could lead to storage systems that offer more features than ever before.
"The storage software market has exhibited healthy growth throughout the year, while the disk storage systems hardware market has only recently begun to show signs of a turnaround," said John McArthur, group vice president of IDC's storage research program.
While disk system sales have bottomed out and software is fast becoming integral to the bottom line of most storage vendors, McArthur said it's important to note that the disk storage systems hardware market is still three times the size of the storage software market. "Throw in tape and tape automation, plus storage networking hardware, and you've still got a real and growing business. The goals in the markets are different," he said.
So what are your disk vendors trying to do to move more machines? According to McArthur, the aim of disk system makers is to invest in areas that will separate their products from the rest of the pack. He expects hardware companies to differentiate their systems by adding more hardware and software features, services and application integration.
McArthur said that one challenge for software suppliers is making sure that they continue to enhance and layer their product strategy.
"The products that deliver a significant portion of the revenue today may come under further price pressure, as the underlying hardware that they are designed to enhance and support continues to commoditize," he said. "Data replication and migration functions come to mind, as more network- and server-based utilities become available at substantially lower price points."
The IDC's worldwide quarterly storage software tracker report shows that the storage software market grew 4.2% in the third quarter of 2003, reaching $1.65 billion in revenue. For the first three quarters of 2003, the market experienced 11.4% revenue growth over the same period in 2002, indicating that 2003 will yield more overall growth in software than 2002.
IDC's list of software supremacy was led by EMC Corp. with Veritas Software Corp. in second, followed by Computer Associates International Inc., IBM and Hewlett-Packard Co., respectively. EMC and HP posted the largest growth among the top five software vendors.
Within the overall market, the largest gain came in the storage replication software market, which grew 7.9%. The backup and archive software market -- the largest segment of the overall market -- experienced 2.7% sequential growth. Meanwhile, the storage resource management market grew by 3.6%.
IDC said the biggest gains were made in the storage replication software market, which grew 7.9% in the third quarter of 2003.
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