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Squeak! - the Top 10 Storage Software Companies - 2002

as ranked by STORAGEsearch.com reader statistics

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Storage Software, Backup software, storage manufacturers, Market research, NAS
storage history:- Top 10 Storage Software Companies:- 2001, 2002, 2003, 2004

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Who are the leading storage software companies of the future?

There were over 130 currently active storage software companies listed in STORAGEsearch at the publication date of this article (about 20% up on last year) which means there was more competition to get into the top 10. Our readership had also doubled in the intervening year. So these results are even more significant and reliable than in 2001.

The ranking, below, is based on the pageviews for each company's profile page during the second half of 2002. Our definition of a "software" company in this context excludes companies which also manufacture storage hardware. (If you want to see the top storage companies in all categories see our review of 2002 which lists the top 5 companies out of more than 1,000 listed on STORAGEsearch.)

Four companies dropped out of the top 10 list from last year. But the companies in the top 6 positions remained the same, with a small reordering of rank in the 3 to 6 slots. That suggests a maturing in the storage software market and casts considerable doubt on the ability of some well funded startups to break through this glass ceiling by organic growth. When the impact of this hardening in the top rank of storage companies is fully understood in the financial community I expect we'll see a swift spate of plugs pulled and companies put on the block. In fact acquisition by a systems company seems to be the fate of about one in three storage companies based on the past record.

The four companies which dropped out from last year's list were:- Atempo, Columbia Data Products, Dantz Development and OTG Software. OTG was acquired by Legato Systems in May 2002.

The four new entries to the top 10 list were:- Legato Systems, StoreAge Networking Technologies, Invio Software and Astrum Software.

If there is any trend to be seen in this top 10 list, it suggests that the enterprise storage software market is what's most important to our readers. You'll find words like iSCSI and "Linux" appearing more frequently in the news stories from these companies than "PC" or "Mac". Standalone directly attached storage and backup are the echoes from the past. The future is all about managing data in the enterprise, wherever that may be.

Zsolt Kerekes, editor

article published:- December 12, 2002,
and updated April 30, 2003


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The Top 10 Storage Software Companies - 2002/2003

as ranked by STORAGEsearch.com reader statistics July to mid December 2002

Rank Company comments
1 VERITAS Software The #1 company last year too! A new side to VERITAS emerged for me in November 2002 when the company put out a news story in which they claimed huge performance benefits for Sun users who also use the VERITAS file system.

VERITAS Software announced that companies who use VERITAS storage software with Sun Solaris 9 experience 15 times faster computing performance and improved system reliability compared to those who simply run the native software provided with the operating system.

The performance acceleration market, in which system performance is increased by software products looks like an interesting thing to keep an eye out for in 2003.
2 FalconStor Software In 2002, it seemed that if a hardware company talked about its iSCSI plans, then FalconStor Software was most often cited as the software partner in that relationship.

FalconStor started the year in February with an interoperability demo with Intel at the Server I/O Conference about which Wayne Lam, FalconStor vice president commented "FalconStor is committed to fully support iSCSI. Our ability to demonstrate today an iSCSI compliant solution with a full suite of enterprise storage services is evident of our efforts."

Later, in July 2002 FalconStor announced it has acquired IP Metrics Software, Inc ., a Euless, TX-based provider of high availability software and services for mission-critical networks.

FalconStor's revenues were on a positive slope compared to the negative slant for much of the rest of IT industry. The company's revenues for the third quarter of 2002 increased by 20% sequentially and 13% compared with the same period the year before.
3 Arkeia Arkeia's focus is the Linux market, and they have over 90,000 users worldwide. Recently, in November 2002, Arkeia released a state-of-the-art disaster recovery module for automatic restoration of lost data. The module offers fast, reliable and easy re-creation of Linux clients or backup servers even if a machine is stolen or destroyed. The module rebuilds a backed up client or the Arkeia backup server from scratch with a simple bootable CD solution.
4 BakBone Software Earlier this year I commented in our news pages about BakBone's financial results, and speculated that they might be on the early part of a classic hockey stick growth curve. For most companies, that kind of growth is wishful thinking, and often appears in the first draft of business plans presented to venture capitalists. In BakBone's case, the high growth rate continued in later quarters. For example in November 2002, BakBone Software announced 76% year on year revenue growth for the fiscal quarter ended September 30, 2002.

Commenting about the company's second year in our top 10 storage software companies list, Andrew Unsworth, Managing Director EMEA, BakBone Software said "In an economic environment proving difficult for many storage companies, BakBone has shown yet another year of continued growth. 2002 has showed significant customer wins and continued success in markets throughout the world. We are thrilled that this success has been recognised by the industry and are proud to be listed in STORAGEsearch.com's top 10."
5 LiveVault 2002 was a year of rebirth for the web based backup and data protection industry. Following two years in which half the companies in this segment went out of business, the survivors were companies which knew what they were doing, and knew how to satisfy customer needs.

In October 2002 LiveVault Corporation announced that the Progress Company is working with LiveVault to provide online backup and recovery services for Progress-based business applications. After evaluation by Progress, LiveVault is now available to more than 2,000 ISVs for resale to the more than 50,000 end-user companies worldwide that run their businesses on Progress-based applications. LiveVault's fully managed online backup and recovery service provides unparalleled protection for Progress-based applications by automatically and continuously backing up server data to a secure, off-site Iron Mountain facility, where it is available for immediate recovery in the event of human error, virus, disaster or system failure.
6 Computer Associates Computer Associates, founded in 1976, has reported $2.99 Billion of revenue in the last 12 months, and as you'd expect for a company that size, CA works with a lot of other companies in the industry. In fact most of the news stories we ran about CA in 2002 were from CA's partners, competitors and market research reports, rather than stories originated by Computer Associates themselves.

In December 2002 Computer Associates International, Inc. (NYSE: CA) announced that it intends to sell approximately $400 million principal amount of Convertible Senior Notes due 2009 through a private offering to qualified institutional buyers under Rule 144A and offshore under Regulation S.
The companies below are all new entrants to our top 10 list this year.
7 Legato Systems In May 2002, Legato acquired OTG Software, one of the companies featured in our top 10 list of 2001. More recently, in December 2002 - Legato joined the rush into the Linux backup and recovery market by announcing support for IBM's eServer zSeries.

""Though there are other backup and recovery alternatives for IBM eServer zSeries running Linux, the others lack the server/storage node functionality that is offered by LEGATO NetWorker for Linux on the Mainframe," commented David L. Beamer, executive vice president and COO, LEGATO Systems."
8 StoreAge Networking Technologies "Storage Virtualization" was a term we saw in more news stories during 2002. And vendors were quick to point out that not only could users save time and money by using virtualization in their storage networks, but also backup speeds could be faster too. StoreAge Networking Technologies announced many new partnerships this year which was the first complete year of sales for its new products. The company, founded in 1999 has received over $28 million of equity investment.
9 Invio Software Invio Software launched its first products in March 2002 - the Invio Storage Practice Manager™, Invio Active Practices™ and the Invio Storage Practice Foundry™. Since then the company has been working to demonstrate compatibility with other SAN infrastructure vendors.
10 Astrum Software In May 2002, Astrum appointed a new president and CEO. Robert Infantino, Astrum's founder commented that the company's strategy was working towards establishing "...Astrum as the market leader in SRM."

Certainly making a debut in this year's top 10 storage software companies list makes that kind of claim more than credible.

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This article plots the main events in the market transition from the heady days when tape backup was at its height - through to the situation now where most corporate data is backed up using disk to disk backup. click to read the article - a Short History of  Disk to Disk Backup
In October 2006 - D2d was the #1 subject viewed by Storage Searchers. ...read the article, Hard disk drives, Backup Software
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Later... here's another list (below) which uses a different definition of a "software company", and is ranked , not by reader behaviour, but by revenue.
Gartner Says Worldwide Storage Management Software Market Recorded its First Ever Revenue Decline in 2002

SAN JOSE, Calif. - April 15, 2003 - Gartner, Inc. says that the worldwide storage management software market reported its first year-over-year decline in 2002. The market reported license revenue of $4.7 billion in 2002, a 6 percent decline over 2001.

EMC remained the No. 1 storage management software vendor in 2002, with market share of 25.6 percent, while its nearest rival, Veritas Software, garnered 18.6 percent (see Table 1). Gartner analysts said if the $1.5 billion in array- and switch-based software were excluded from the analysis, Veritas would be in the lead, and EMC would move to the No. 3 slot behind IBM.

"Only three of the top 10 vendors were able to grow software revenue in a very challenging year," said Carolyn DiCenzo, vice president for Gartner's storage group. "Hitachi/Hitachi Data Systems, which sells its storage array software directly, and through Hewlett-Packard and Sun Microsystems, saw 77 percent growth in 2002."
Table 1
Top 10 Storage Management Software Vendors for 2002 Based on New License Sales (Millions of Dollars)
Company 2002
Revenue
2002
Market Share (%)
20001
Revenue
2001
Market Share (%)
Growth (%)
EMC 1,205 25.6 1,496 30.0 -19.5
VERITAS Software 874 18.6 977 19.6 -10.6
IBM 592 12.6 639 12.8 -7.4
HP 264 5.6 268 5.4 -1.7
Computer Associates 235 5.0 202 4.1 16.0
Hitachi /HDS 209 4.5 118 2.4 77.0
Legato Systems 135 2.9 180 3.6 -25.1
BMC Software 121 2.6 161 3.2 -24.6
Network Appliance 107 2.3 89.4 1.8 19.8
StorageTek 106 2.3 120 2.4 -11.7
Others 847 18.0 734 14.7 15.3
Total 4,698 100.0 4,989 100.0 -5.8

Source: Gartner Dataquest (April 2003)
HP acquired Compaq Computer in 2001, and even though revenue declined 2 percent in 2002, the combined company moved into the No. 4 slot, up from the No. 5 position earned by Compaq in 2001.

"The depressed economy, resulting in tight spending and pressure on product pricing, has finally taken its toll on the storage software market," DiCenzo said. "Infrastructure and data management software will remain under pressure as long as server and array sales are depressed. Device and storage resource management tools continue to report growth."

Additional information on the storage management software market is available in the Gartner Dataquest Research report "2002 Storage Management Software Market Share." ...Gartner profile

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