Disaster Fears, Regulations Boost Storage Software Sales

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Storage software sales experienced a bang-up second quarter, with 7.3% sequential growth over the first quarter, according to IDC’s Worldwide Quarterly Storage Software Tracker.

Sales were boosted by disaster fears and new record retention regulations.

“The markets for both storage replication software and backup and archive software are being accelerated by renewed customer emphasis on data protection and disaster recovery, as well as recent record retention and retrieval regulations,” says Bill North, IDC’s research director for Storage Software.

And that was before the recent spate of viruses and the massive Northeast power outage, which could make the third quarter even stronger.

The worldwide storage software market reached $1.6 billion in the second quarter. The storage replication software market had the largest sequential gain, growing 8.5%. Growth in the backup and archive software market, which is the largest segment in the storage software market, was consistent with the overall market at 7.3% sequential growth. The storage resource management market grew less than the overall market, with 6.1% sequential growth.

North reports every segment of the storage software market grew over the first quarter results. The storage resource management market faces continued budget priority pressures, which accounts for its more modest gains, he added.

EMC maintained its lead in the second quarter, with a 26% revenue share, gaining nearly 1.5 percentage point since the first quarter of 2003 thanks to strong 13.6% sequential growth. With the acquisition of Legato, ranked number 6 with 4% market share, EMC’s lead should widen even further. EMC said multi-platform and platform-specific software sales were both strong in the second quarter.

VERITAS maintained the second position with a 21% share, slightly outpacing the overall market with 7.6% sequential growth. EMC and VERITAS are the only two storage firms with more than 10% market share.

Computer Associates and IBM tied for the fourth position, while HP followed in the fifth position with strong 10% sequential growth. EMC and HP were the only two vendors among the top 5 to post double-digit sequential revenue growth. StorageTek, CommVault, and Sun, ranked 8th, 9th, and 12th, respectively, also posted double-digit sequential growth in the second quarter.

Top 5 Vendors, Worldwide Storage Software Revenue, Second Quarter 2003 (Revenues are in Millions)

Vendor	Q2 2003	Market Share	Q1 2003	Market Share	Sequential Revenue Growth Q2/Q1

EMC	$399	26%	$351	24%	13.6%
VERITAS	$323	21%	$300	21%	7.6%
Computer Associates	$142	9%	$139	10%	1.8%
IBM	$134	9%	$125	9%	7.8%
Hewlett-Packard	$107	7%	$98	7%	10.0%
Others	$458	29%	$444	31%	2.2%

All Vendors	$1,563	100.0%	$1,457	100.0%	7.3%
Source: IDC, September 2003