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Guest Nibble:-

by Bob Abraham, President
Freeman Reports

Tape Library Market Snubs Economic Slump

LTO Libraries Steal Spotlight with Runaway Growth in 2001, 2002

OJAI, California - March 27, 2002 - Despite the sluggish global economy of 2001, the tape library industry achieved unit growth of 3% and revenue decline of only 4% compared to 2000 according to the newly completed Freeman Report, Tape Library Outlook 2002. Total demand for tape libraries rose to 63,500 units in 2001 and is projected to climb to 134,800 units in 2007, a compound annual growth rate of 13%. Revenue fell slightly to $2.15 billion in 2001, but will recover quickly and rise steadily to $3.6 billion in 2007, a growth rate of 9%. Total unit shipments and industry revenue will both see strong growth this year vs. 2001.

"LTO libraries took market share from every competing technology in virtually every market segment. LTO libraries were the only category to show growth in 2001, more than offsetting the combined declining shipments of all other categories," says Robert C. Abraham, author of the report. "The increasing adoption of SAN and NAS network storage solutions continues to be the dominant driving force in the growth of automated tape libraries."

LTO Libraries Delight Users, Stun Competition

"The magnitude of the growth of LTO libraries in 2001 was impressive, especially in a slumping economic environment," observes Abraham. Library manufacturers quickly adopted these leading edge compact drives and demand for the libraries leaped from less than 700 units in 2000 to 13,200 units in 2001 as many performance-oriented users choose not to wait for Super DLT or AIT-3. Shipments will grow another 53% in 2002 to 20,100 units and to 55,000 in 2007, a compound growth of 27%. Factors underscoring this strong growth projection include an early market entry, multiple sources for the key library components, a well defined technology migration path, a wide range of library offerings, and competitive pricing.

Despite a significant decline in shipments, DLT libraries retained top volume position in the tape library market in 2001, and will the lead through 2007. DLT libraries commanded a 57% share of 2001 unit shipments, down 12% from the previous year. This percentage will erode to 41% by 2007 due primarily to the continued intrusion of LTO libraries. LTO libraries comprised 21% of unit shipments in 2001 and will match DLT's 41% share of units in 2007. Eight-millimeter libraries accounted for 16% of the 2001 units and will essentially hold that portion of the market through 2007.

Libraries incorporating half-inch cartridge drives, Magstar MP drives, and high performance helical scan drives account for the remaining 6% of unit shipments in 2001. These combined units will comprise 2% of the 2007 total. Shipments of tape libraries using DAT drives ceased in 1999. The market for QIC/SLR libraries has failed to develop and comprise a negligible part of the tape library market.

Revenue Rankings Quite Different

The much higher prices commanded by half-inch cartridge tape libraries allowed them to continue their historic lead in industry revenues in 2001. These models accounted for 42% of library revenue in 2001, down from 52% in 2000. That share will drop to 19% in 2007 as LTO library revenue, which accounted for 20% of 2001 revenue, surges to 40% of 2007 revenue.

"The market for half-inch cartridge libraries is being impacted by the emergence of LTO libraries. Erosion of this segment is also driven by the effects of volume stacking, a feature found in mainframe computers which allows greater utilization of media cartridges, thus requiring smaller or fewer libraries", observes Abraham. DLT libraries comprised 30% of the industry's 2001 revenue. Modest growth will enable DLT's revenue share to grow to 32% by 2007. Together, DLT and LTO technologies will account for 82% of library units and 72% of library revenue by 2007. "Large capacities, high transfer rates, fully standardized media and formats, and a wide spectrum of product offerings will account for the popularity of these two technologies," states Abraham. ...Freeman Reports

2001

2002

2007

8-Millimeter

9.9

11.8

21.4

Magstar MP

1.3

0.5

0

DLT

36.2

35.5

55.5

LTO

13.2

20.1

55.0

Half-Inch Cartridge

2.6

2.4

2.4

Helical Scan

0.3

0.3

0.5

TOTAL UNITS

63.5

70.6

134.8

2001

2002

2007

8-Millimeter

113

127

257

Magstar MP

22

7

0

DLT

643

703

1,126

LTO

432

621

1,453

Half-Inch Cartridge

897

797

699

Helical Scan

44

48

63

TOTAL REVENUE

2,151

2,303

3,598