Storage Software Sales Recover Well in 2010

April 11, 2011 Timothy Prickett Morgan

As is the case in the system market, you need hardware sales to drive software sales in the storage racket, and most of the profit is in the software, not the hardware, but a lot of the revenue is still in the hardware. You need both to be in business.

The analysts at Gartner gave us a sense of how storage disk array market did in 2010. And now it is IDC‘s turn to talk about the sophisticated file system, archiving, mirroring and replication, and other storage software that vendors sell to ride atop servers and storage arrays.

IDC reckons that for all of 2010, vendors peddled $12.7 billion in storage software, an increase of 10.3 percent compared to 2009. Thanks to the Great Recession, storage software sales contracted by 3.2 percent in 2009. Storage infrastructure software saw a 23.6 percent increase last year, hitting $1.2 billion in sales, and data protection and recover was the largest piece of the market, at $4.4 billion in revenues, but only grew at 11.2 percent compared to 2009.

“The storage software market is in the midst of a sustained recovery, which is partly driven by new product innovations, and partly by a strong desire to address inefficiencies related to storing, protecting, and managing corporate data,” explained Eric Sheppard, research director with IDC’s storage software program, in a statement accompanying the statistics. “A considerable increase in storage software designed to enable automated storage tiering, coupled with a continued market trend of addressing aging, inefficient storage deployments were two important drivers of market growth during the quarter.”

In the fourth quarter, storage software sales rose by 10.6 percent, to $3.4 billion, marking the fifth straight quarter of consecutive growth for this sub-market. EMC, thanks to acquisitions as well as organic growth, boosted its storage software sales by 18 percent, to $866.1 million, in Q4. Symantec, which owns the popular Veritas file systems used on Unix boxes as well as myriad archiving and other storage solutions, had flat revenues, at $543 million. IBM ranked third, with $442.9 million in sales, up at market pace by 10.4 percent. NetApp grew slightly faster than the market at large, with sales up 13 percent, to $311.7 million.