Growth seen for storage software market
After posting a decline last year, the market for software that manages storage networks is expected to return to modest growth this year, according to market researcher Gartner.
The research firm projected that revenues will reach $4.8 billion, a slight increase from last year's $4.7 billion, with a tough economy and intense competition continuing to limit growth.
"The storage management software market will continue to struggle following a year where revenue was lower than forecast," Carolyn DiCenzo, vice president of Gartner, said in a statement. The market reached nearly $5 billion in 2001 before declining by nearly 6 percent last year.
"Political uncertainties continue as the war in Iraq winds down, and travel is further restricted by the SARS (severe acute respiratory syndrome) disease in Asia," DiCenzo said. "Growth is returning to this market, but much more slowly than anticipated."
The strongest segment of the market, Gartner said, is software known as enterprise storage resource management, which helps large companies track and manage networks of storage gear. Such software is seen growing by more than 11 percent this year.
Software has become an increasingly important part of the storage market. For customers, software that automates the tasks of managing storage gear is critical, because the amount of information that companies need to store has continued to grow while the number of people who are needed to manage such systems has remained flat or declined.
At the same time, hardware makers such as EMC have moved aggressively into the software market, prompted by the prospect of higher margins and insulation from the constantly declining price of disk drives.
In the report, Gartner noted that there are strong opportunities for software makers to deliver applications that make it easier to control software networks, particularly for those that do so in a visual way. However, the analysis firm said most companies still need to address issues within their information technology departments about how storage is managed before such software can be made effective.