Three years of decline in the tape market has given way to steady growth, as users move from small desktop and entry-level tape systems to faster drives and centralized backup architectures, according to the latest research from Freeman Reports, an Ojai, Calif.-based analyst firm specializing in the tape market.
According to the report, the demands for long-term data retention, storage consolidation, new backup architectures like disk-to-disk-to-tape and continuing growth in networked storage are changing the tape industry as we know it.
"The world is changing and the [IT] environment is changing," said Robert Abraham, president and lead analyst for Freeman Reports. "Users are moving to more distributed storage with more nodes and remote sites that are no longer backed up in the office using lower cost drives. Remote backup requires much larger, more robust, higher capacity drives."
Not only is the market changing as a whole, but Abraham said users are changing tape technologies as well. The trend toward the centralization of tape is lending itself to the so-called "super drives," including LTO, SDLT and SAIT drives. The shift is leading to heavy declines in desktop and entry-level tape systems.
Super drives accounted for 22% of all tape shipments and 59% of all revenues in 2003, up from 14% and 45% in 2002, respectively. Abraham projects that LTO, SDLT, SAIT and high-end 8 mm drives to make up 46% of unit shipments and 77% of tape revenue
On the flip side of the super drive growth is the entry-level segment, primarily served by DLT, Travan, SLR, DAT and low-end 8 mm tape formats. Abraham said these drives combined for 1.61 million devices in 2003, down significantly from its peak of 3.7 million units shipped.
"The declines in these sectors underscore the shift in the industry from desktop backup to network backup," Abraham said.
EMC Corp., Hopkinton, Mass., threw its weight behind the super drive shift recently when it entered a reseller agreement with tape specialist Advanced Digital Information Corp. EMC will sell ADIC's Scalar 24, Scalar 100, Scalar i2000 and Scalar 10K tape libraries with LTO tape drives.
This is a move that Abraham said EMC should have made years ago. "If they had been paying attention to tape, they would have realized that tape has historically had a higher profit margin than disk and is a more steady commodity to sell," he said. "EMC has never really encouraged the sale of tape, but now they've basically turned that around."
In terms of tape drive revenue, Hewlett-Packard Co. has moved ahead of Quantum Corp. into the top spot based on "strong LTO sales" with a 28% market share. Quantum holds a 27% share of the market while IBM slid into the third spot with a 17% share of the drive market.
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