IDC: Storage resource management software sales soar

The global storage software market saw a third consecutive quarter of growth as sales of storage resource management applications took off during the second quarter of the year, according to research firm IDC.

IDC's Worldwide Quarterly Storage Software Tracker showed Tuesday that the storage software market grew to US$1.85 billion in total revenue, up 16.9 percent from the same quarter in 2003. The increase was driven by strong demand in storage resources management (SRM) software.

IDC analyst Bill North said device and SAN management software use grew by 36 percent year over year, and SRM software growth was driven "primarily by customer need to support larger and more complex storage networks, combined with a gradual decline in the more mature backup and archive software market."

The SRM market now represents "the largest functional market of storage software, growing more than 30 percent year over year," IDC said.

Backup and archive software continued to grow, showing a 9.2 percent year-over-year increase. The storage replication software and file system software functional markets also showed strong results in the first quarter, with 13.5 percent and 18.5 percent year-over-year growth, respectively.

The battle for the top spot in software sales changed little over the past year. EMC and Veritas Software posted the strongest results among the top five vendors, with 30.5 percent and 23.4 percent growth, respectively.

EMC led the overall market in the quarter, with US$602 million in revenue and a 32.5 percent share of the market, up 3.4 percentage points over the same quarter of 2003. Veritas held on to second place, with a 22.6 percent revenue share, gaining more than 1 percentage point of market share year over year. Veritas reported US$418 million in sales from storage software.

IBM and Hewlett-Packard each gained market share against Computer Associates International, which resulted in a three-way tie for third place in the market, with each company reporting about US$130 million in revenue, IDC said.

In a separate forecast released today, analysts at Merrill Lynch revised earlier predictions and said the storage software market will grow at 7.3 percent through 2008. That compares with a combined annual growth rate of 11.2 percent through 2007 that Merrill Lynch earlier projected.

The fastest-growing segments of storage software are expected to be hierarchal storage management and storage resource management, where EMC has a dominant and growing presence, Merrill Lynch said. The slowest-growing segment will be backup software, where Veritas dominates.