Volume 4, Number 20 -- May 31, 2007

IDC Projects Disk Capacity to Grow, But Revenues to Flatten

Published: May 31, 2007

by Timothy Prickett Morgan

Thank heavens for the Internet, rich media content, governance, and regulatory compliance. That is what executives at the vendors of disk arrays must be saying to themselves each night as they go to sleep. The voracious appetite for disk capacity in enterprise systems has been growing at 60 percent a year for so long that people think it is a law, and if the projections made by IDC are correct, then the IT community's appetite for disk capacity in the coming years is not going to abate.

According to a recent report entitled Worldwide Disk Storage Systems 2007 - 2011, the analysts who track the disk storage market at IDC are still projecting that aggregate disk capacity shipments worldwide will grow at nearly 60 percent (compounded annually) through 2011. However, IDC cautions that the continuing growth in disk capacity shipments will be counterbalanced by a fall in the cost per unit of capacity that vendors can charge, and the result is that revenue growth will slow for disk array subsystems, hitting around $31 billion in 2011, based on IDC's projections. By that time, disk subsystems that are virtualized and therefore efficient at using storage (so-called capacity-optimized storage systems in IDC lingo) will account for about two-thirds of sales, or just under $21 billion. The remaining $10 billion will come from performance-optimized disk arrays, which simply have the fastest components and the fattest bandwidths and I/O capacities.

IDC is also projecting that iSCSI SANs will be the fastest growing segment of the disk market, as it has been for a while, and will account for about a quarter of external disk array sales by 2011.

"Storage system OEMs will be thrilled with new opportunities generated by explosive growth in fixed content and data protection initiatives, by user concerns about data management and regulatory compliance, and by demand for more efficient energy consumption and data reduction tools," explains Natalya Yezhkova, research manager for IDC's storage systems research. IDC says that in the near term, transitions to new technologies will drive storage purchasing decisions, but over the long haul, sales will be based on cost as well as on energy and storage efficiency.

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Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik,
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