|2003 was the 3rd year
of the US IT recession, which officially ended in the 3rd quarter according
to IDC. In 2002 it was
rare to see news of revenue growth in our
storage news pages. But
in the 4th quarter of 2003 good financial news became a regular event. Here are
some examples which relate to revenues in Q303...
Tape backup is one of the oldest product segments in the storage market so it's interesting to see how this market changed. The tape drive market had shrunk 8% in revenue in 2002 according to Freeman Reports, and there was little sign in company reports during 2003 that the tape market was going to recover. STORAGEsearch believes that there is a new barrier to revenue growth in the tape backup market. Disk to disk backup which started out as a niche technology evangelized by Nexsan Technologies just a couple of years before gained a lot of new converts in 2003 - including many tape library companies. The writing was on the wall. The declining cost of hard drives, the massive expansion in corporate data, and the growth of internet backup and offsite replication technologies like iSCSI together meant that the traditional advantage of tape - that you could walk out of the building carrying the backup - was no longer true for most companies.
So if tape backup no longer offered convenient off-site data security for most users - it would have to find a new role. I believe that new role is at the entry level, in very small installations - and at the other end of the scale in systems on a Petabyte scale - where tape libraries have been proven, and cautious users will resist the unknown risks and management factors in disk to disk backup. The fate of StoneFly Networks, the pioneer in very large capacity disk to disk systems, will be scrutinized carefully by many to see if this technology really is a viable alternative to tape libraries.
The Top Storage Companies in 2003
We can learn a lot about what users think is important in the storage market by looking at the most popular companies on the STORAGEsearch web site which includes profiles for over 1,000 storage companies. The top companies of the year in 2003, measured by STORAGEsearch reader pageviews on their company profile pages, were as follows:- Maxtor, IBM and Sony.
The 3 new entrants in the top list were Dell, BakBone and Texas Memory Systems.
In the case of Dell, this was no surprise. In my article January 2001 I predicted that Dell would be one of the top 10 storage companies (measured by revenue) in 2003. As this has come to pass there has been strong interest in the storage announcements by the company.
BakBone Software was identified as one of the fastest growing storage companies in 2003, having reported 82% year on year revenue growth. The storage software market was one in which most of the growth was being acheived by small and medium size vendors. One of the biggest fish in this pond, Legato Systems, was acquired by EMC in July for $1.3 billion. Legato's mounting losses had made acquisition or bankruptcy almost inevitable. Legato was the 200th company to be listed in our acquired, dead & merged companies list - a dubious distinction.
Texas Memory Systems had two windfalls in 2003. Solid state disks became a very popular subject - as users looked at alternative ways to speed up high end servers. The SSD market could be worth as much as $10 Billion in 2007. The other windfall was that their main competitor Imperial Technology went bust in the summer.
The Most Popular Subjects
There are over 60 storage categories on STORAGEsearch. The top 5 most popular, based on pageviews in the first 11 months of 2003 are as follows. Seagate Technology said in December it had shipped more than 1.5 million SATA hard drives - more than twice the number of its nearest competitor. This new market has great potential according to Gartner who projects that Serial ATA hard disk drives will grow to nearly 350 million units in 2006.
2003 was the year that iSCSI transitioned from being a vaporware market into real product shipments - boosted by Microsoft's support in the summer. See article:- iSCSI is now a market reality.
In 2003 increased demand and prices for memory products boosted the revenues of semiconductor companies who made these products. The Flash Memory market grew 25% (to $9.7 billion) according to SIA. AMD reported in October that their flash revenue had doubled to $424 million for the third quarter. The faster than expected growth in the RAM market was a factor in Infineon's 26% revenue growth.
Pick of the News Stories in 2003
January 2003 - A new hard disk form factor was born... Hitachi
Global Storage Technologies introduced a new 1.8-inch form factor for hard disk
drives aimed at handheld computers aimed at portable consumer electronics. The
Hitachi Travelstar Compact Series C4K40, was launched with 40 and 20 gigabyte
February 2003 - A new tape form factor hit the
streets... Sony Electronics started shipping production units of its
first-generation SAIT drives and media to tape library automation OEMs. With the
ability to store up to 1.3TB of compressed data on a half-inch tape cartridge,
SAIT-1 staked its claim as the industry's highest capacity tape drive and the
first available product to break the 1TB barrier.
March 2003 - SATA drives made their first retail
appearance... Seagate and Best Buy, one of the nation's leading entertainment
technology retailers, became the first to offer Serial ATA hard drives to
April 2003 - Emulex and Intel announced they were
collaborating one the development of next-generation storage processors that
would integrate Serial ATA, Serial Attached SCSI (SAS) and Fibre Channel
interfaces within a single architecture.
May 2003 - InoStor was awared a US patent for its
RAIDn technology. InoStor said that RAIDn could deliver greater availability
than typical RAID schemes with equal disk drive investment, and was looking for
The New RAIDn Algorithm - How Does it Compare?
June 2003 - Unigen was awared a US patent for a data
protection algorithm for semiconductor devices which allows the safe storing of
data without corruption by anyone other then the intended user. The unique
algorithm is applicable to all types of Non-Volatile Memory (EEPROM, Flash,
July 2003 - The summer was a hot time for iSCSI
announcements. EMC announced it had added native iSCSI connectivity across the
entire Symmetrix DMX series.
August 2003 - A power grid failure in mid August
knocked out electricity supplies to millions of people in New York and Canada
for a long weekend. This caused peak readership spikes on STORAGEsearch as IT
managers and individuals looked at articles about data recovery.
October 2003 - Silverback Systems announced it was
shipping its iSNAP 2100 storage network access processor, the highest
performance solution for implementing iSCSI. Silverback reported 220,000 IOPS
for the dual-channel, gigabit Ethernet iSNAP2100, demonstrating iSCSI
performance for both database and OLTP traffic.
November 2003 - SBS Technologies introduced the
industry's first InfiniBand HCA to be provided on a PCI mezzanine card (PMC).
With dual 20 Gb/s 4x InfiniBand ports, the IB4X-PMC-2 HCA was a
second-generation product and included application support for Sockets Direct
Protocol (SDP), Internet Protocol over InfiniBand (IPoIB) to enable TCP/IP to
run over InfiniBand links, and SCSI Remote Protocol (SRP) initiator to enable
SAN. This was convincing proof that if anyone out there wanted to use InfiniBand
for embedded applications - the products were available.
December 2003 - Seagate Technology announced it had
shipped more than 1.5 million Serial ATA hard drives - more than twice the
number of its nearest competitor.
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