Storage market shrinks

By Greg McNevin

March 9, 2009: For the first time in over five years, IDC has found that the external disk storage market has shrunk, with its quarterly tracker recoding a year-on-year decline of 0.5 percent.

Not a huge decrease of course, but considering the market has been going gangbusters for so long, the decline shows that the financial crisis is finally weighing in what was in some circles considered an unassailable sector.

According to IDC, revenues totalled US$5.3 billion in the fourth quarter of 2008 (4Q08), while the total disk storage systems market revenue were US$7.3 billion - a decline of 5.9 percent from the same period in the previous year.

The analyst firm pegs the decrease on weakness in server systems sales, as the total disk storage systems capacity shipped reach 2,460 petabytes, growing only 27.3 percent year-on-year.

“Because of the global economic crisis, the last quarter of 2008 was tough for the disk storage systems market,” said Natalya Yezhkova, research manager, Storage Systems. “The negative impact, however, varied among market segments.”

“For instance, high-end storage was impacted negatively by a freeze in end-user spending and longer purchasing cycles; but some low-end and midrange storage segments actually increased as end users broadened their search for storage solutions in these lower-cost segments to satisfy their increasing storage needs while optimising investments in storage infrastructure," said Yezhkova.

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