Survey: Storage Growth Outpaces PC, Server Markets

By Chris Preimesberger  |  Posted 2006-05-12 Print this article Print

E-mail and backup concerns are leading to increasing growth in direct-attached storage and NAS, says a Merrill Lynch survey.

The networked and attached data storage market is growing 5 to 9 percent faster than the server and personal computer markets, according to a Merrill Lynch industry survey of 75 U.S. and 25 European CIOs. Merrill Lynchs 2005-2007 compound annual growth rate estimate of 11 percent for storage hardware easily surpasses the firms server and PC annual growth rate estimates of 2 percent and 6 percent, respectively. The survey found that IT budgets are finding more room for storage-related purchases.
"We believe the storage industry has enough momentum to sustain a low-double-digit growth through 2007 and outpace the rest of the major IT hardware segments," wrote Research Analysts Richard Farmer and Neal Austria in the May 12 report from Merrill Lynch, based in New York.
Storage powerhouses are competing for the midmarket. Click here to read more. Storage hardware is steadily increasing as a percentage of IT budgets, the report said. Results from the survey indicate a 2.4 percent increase in storage-related spending in 2006. E-mail was the most cited driver of storage growth in 2005, and the CIOs surveyed in the report expect the same in 2006, Merrill Lynch said. Backup and recovery was the second most important driver of spending in 2006—and is the No. 1 storage issue keeping CIOs awake at night. Other major drivers are database, new applications and simple business growth, Merrill Lynch said. EMCs buying spree snares Interlink. Read more here. EMC was the most preferred vendor in the survey, holding a 25 percentage-point lead over its closest competitor, Hewlett-Packard. Network Appliance garnered a three-point share in vendor preference, but 7 percent of CIOs said they expect that company to take some market share in their organizations in 2006. IBM also posted a four-point gain, which could indirectly benefit Network Appliance, because IBM is an OEM of its network-attached storage. Merrill Lynch forecasts an external disk storage growth of 11.9 percent in 2006, remaining essentially flat from the 12.1 percent growth in 2005. For 2007, the firm predicted a slight deceleration to 10.5 percent—which is still strong relative to the 7.3 percent compound annual growth rate it predicted for 2002-2005. The firm said it expects IT storage spending to continue to shift toward networked storage at the expense of direct-attached storage, resulting in networked storage growth of 18.6 percent in 2006 and 16.3 percent in 2007, compared to 20.4 percent in 2005. Check out eWEEK.coms for the latest news, reviews and analysis on enterprise and small business storage hardware and software.
Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel