Booming Data Storage

Business Week writes about the rapid growth in the demand for storage, nearly dobling every year:

Until recently, storage was predominantly a hardware business — boxes big and small (including so-called flash memory cards) still account for about $14 billion in annual revenue. But software that extends the life of such hardware is where the growth is now. Veritas says in each of the past four quarters its revenues have set records — not bad, considering the three-year tech slump. Market researcher IDC forecasts that the $5.7 billion software segment of the storage biz will grow at a 12% compound annual growth rate through 2007, vs. 4% for the more competitive hardware market.

Every supplier should benefit as storage becomes easier to install and use — but chief among the winners will be the sellers of storage software which, more than hardware, can deliver efficiencies in a flash.

By making software development easier, the new standard should also fuel innovation. The greatest potential for that may be in what’s already the hottest corporate segment: Storage resource management (SRM) software, which is used to control an organization’s entire storage operation. When a storage device becomes 80% full, for instance, this software can automatically delete certain files or move them elsewhere. Because of the potential savings in labor costs, “comprehensive storage management is the holy grail,” says Bill North, a research director at IDC.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.