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Gartner: Storage management software rebounding

After a bleak 2002, sales of software to manage data storage rose 8 percent last year to $5 billion, and growth should continue this year, the research company says.

In the latest sign of a healthier technology spending climate, the market for software to manage data storage is bouncing back, according to researcher Gartner.

Worldwide sales of software for tasks such as data backup and recovery rose 7.9 percent in 2003 to $5 billion, Gartner said Monday. The storage management software market had declined 5.8 percent to $4.6 billion in 2002, the first time it had dropped in revenue, Gartner said.

Gartner analyst Carolyn DiCenzo forecasts another expansion this year. "I'm expecting that the growth will be about the same this year," she said.

EMC ranked first in sales in 2003, with 28.3 percent of the market. The Hopkinton, Mass.-based storage specialist made a strong push to expand its software offerings last year by acquiring companies such as Legato Systems, which makes data backup and recovery applications. EMC also sells data storage hardware.

Veritas Software held second place on Gartner's list, with an 18.7 percent market share. IBM was third with 13 percent market share, followed by Hewlett-Packard with 5.6 percent and Computer Associates with 5.3 percent. Of these top five, only IBM and HP gained market share last year, Gartner said, with HP bumping Computer Associates International out of the fourth spot.

The report comes on the heels of other upbeat news for technology vendors. Researcher IDC recently said spending on information technology worldwide will rise 5 percent this year, up from 2 percent growth last year.

Last month, IDC said storage software revenue rose 8 percent in 2003 to $6.29 billion. The market jumped 18 percent in the fourth quarter of the year, IDC said, thanks partly to efforts by companies to meet data-handling regulations.

Spending on storage software remains lower than spending on storage hardware, according to IDC. But software is becoming more central to organizations, as they seek to squeeze more out of their storage gear and cut administration costs.