What's Expected From The Mass Storage Market In 2001?

The explosive growth in information needing to be stored shows no signs of slowing down. A recent study on storage was conducted by the School of Information Management and Systems (SIMS) at the University of California, Berkeley. The study found that over the next three years, humans will generate more original information than was created in the previous 300,000 years combined. Granted, 300,000 years ago humans were not generating much information other than the occasional scribble on a cave wall. Even so, the rate at which information and content is growing is truly astounding.

Exactly how much information are we creating? In 1999 the world created 1.5 exabytes of unique information, which is equivalent to 1.5 billion gigabytes. That works out to 250 megabytes of new information for every man, woman, and child on the face of the earth. According to Hal Varian, dean of SIMS and one of the senior researchers on the study, that number is expected to double every year for the foreseeable future. And that figure does not even include the multiple copies that most information generates.

The SIMS study also found that there are 12 exabytes of unique content in the world today, with most new information being created in digitized electronic form. The vast majority of this information is being stored on disk-based technology because of its easy access and declining costs. With the growth in information not expected to slow anytime soon, this certainly seems to be the right time to be in the storage industry.

Mass Storage — No Longer The Boring Technology
Storage was once looked upon by many users as the most boring segment of the IT industry and was never a high priority for IT buyers. That has changed. I have seen figures estimating that storage can now account for 50% to 75% of the cost of an IT system. Storage is now one of the fastest-growing segments of the technology market.

The mass storage industry now boasts a stable of solid and growing companies including Network- Appliance, EMC, QLogic, Hewlett-Packard, IBM, Compaq, and Quantum. The future for these companies continues to look good. A recent survey of CIOs conducted by Merrill Lynch reveals that spending on storage area networks (SANs) will increase by 48% over the next year and by 68% the following year. Spending on network attached storage (NAS) will increase 37% this year and 61% in 2002.

Even more exciting is the potential for additional growth that still exists in these markets. In this exploding storage market, the Merrill Lynch study also found that only 5% of the companies interviewed had a SAN or NAS deployed. Forty-six percent of those companies had plans to deploy or evaluate SAN and NAS in the next six months. This untapped market will create tremendous opportunities for storage-centric VARs.

Integrators Predict Significant Growth In Mass Storage
Another survey, this one conducted for BakBone Software, interviewed 100 resellers and system integrators of data storage systems. The integrators, chosen from all over North America, were asked to predict trends in the storage needs of their customers. A majority of those interviewed believe their clients' storage requirements will continue to experience high growth in the coming year. Some felt that increase could be as much as 75% over current requirements.

The survey also found that more companies than ever before are adopting SANs as the method of dealing with their increasing storage requirements. However, the survey also determined that many clients still have worries regarding SANs. The biggest concerns revolve around the complexity of SANs and interoperability problems, or making the software and hardware from different vendors work together. The integrators rated "ease of use" as one of the most important attributes needed in today's storage configurations.

There are some factors that could still have a negative impact on mass storage VARs in the coming year. The overall economy and looming threat of a recession could certainly play a part in the growth of storage and storage companies in 2001. Storage companies have also not been immune to the recent slump in the stock market, and technology stocks in particular. Despite that, we look for storage to continue to play a major role in IT spending, making this one of the most exciting end-user markets for VARs.