Asian storage market still growing

SINGAPORE--Despite economic pressures that have led to spending constraints, sales of disk storage systems in the Asia-Pacific region increased by about 5 percent in the first half of this year, due to a strong demand for storage capacity.

The disk storage systems market was valued at $1.24 billion in the first six months of 2001, compared with $1.18 billion in the corresponding period last year, according to a report from researcher IDC. Total capacity in the six months ended June this year was 14,325 terabytes, up 94 percent from the same period last year.

Disk storage systems are where an organization's primary data is stored, and typically consist of six to 100-plus disk drives, attached either externally or internally to a server via a controller, explained IDC analyst Graham Penn.

"Although disk storage systems internal to the server have experienced growth at a higher rate than the increase in the number of servers, it is the external disk storage systems that are experiencing the largest increase in demand," Penn said in a statement.

He added that external storage systems are key building blocks for storage area networks (SANs) and network attached storage, and are also being used for "rack-mount installations."

IDC noted that the weak economic climate generally had prompted buyers to opt for low-cost direct attached storage or network attached storage systems.

Penn said in an e-mail interview that the strongest revenue growth was seen in China.

However, the Australia-based analyst pointed out that the higher year-on-year revenue growth for disk storage systems in the first six months of 2001 was impacted by the dramatic 30 to 40 percent fall in the price of storage capacity per gigabyte.

"This was mostly caused by technology change, that is, larger-capacity hard disk drives in the arrays at nearly unchanged prices, but also by a changing mix of direct attached storage and network attached storage, and by competitive actions by some/most vendors as they competed for market share," Penn said.

Penn said EMC was the leading storage revenue generator, followed by Sun Microsystems, Compaq Computer, IBM and Hewlett-Packard respectively. However, he declined to provide actual revenue figures.

Penn declined to provide a full-year forecast for disk storage systems revenue in the region, but projected that the region would chalk up second-half sales of about $1.26 billion, up from $1.32 billion in the same period last year.

He cited "the lagged impact of the economic slowdown in many Asia-Pacific markets" as part of the reason for the projected drop in revenue for the second half of 2001. "This is still being offset by a strong demand for storage capacity and also partially by an expected demand for additional capacity for data replication/business continuity purposes following the Sept. 11 events in the U.S.," he said.

Staff writer Anand Menon reported from Singapore.