BY HEIDI BIGGAR
According to Freeman Reports' 2001 Tape Library Outlook, the library market is on the threshold of robust growth. Unit shipments are expected to more than double over the next six years, from 61,800 units last year to 133,000 units in 2006. Revenue, meanwhile, will increase more slowly from $2.3 billion to $3.8 billion, reflecting the move by end users to lower-cost open-system libraries.
This growth, says Bob Abraham, author of the recently published report, can be attributed to the increasing popularity of network-attached storage (NAS) and storage area networks (SANs) and to recent advances in underlying tape technologies, particularly Super DLT and LTO Ultrium. "SAN and NAS are driving library growth," he says. "Without these, the market would be having a much tougher time."
Abraham does not believe that the current economic slowdown will significantly affect his market projections, which he says are conservative. Historically, tape has been less susceptible to economic cycles than other market sectors (e.g., the hard-drive business), where competition is fierce and profit margins are razor-thin. "The library market is not immune, but it is less susceptible," says Abraham.
While DLT libraries will retain the top volume position throughout the period, Abraham says he expects Ultrium to increasingly erode DLT footing. "It won't be quite a 1:1 displacement," he says. "Ultrium will occasionally displace other technologies, too." None-theless, Abraham's forecasts call for total DLT shipments (all DLT formats, including Bench-mark's DLT1) to drop from 69% to 43% over the forecast period and for Ultrium units to increase from less than 1% to 38%.
Abraham says that while it may be a bit early to make such projections, which are based on a yet-to-be-developed Ultrium market, he says early indications confirm a quick LTO ramp and strong market acceptance.
From a revenue standpoint, DLT is expected to become the top revenue producer this year, ousting half-inch cartridge (e.g., IBM Magstar and StorageTek 9840) from the number-one spot, with about $1 billion in sales. Half-inch cartridge revenue is expected to decline to $722 million in 2006, down from $1.2 billion in 1999.
Abraham says DLT will maintain its leadership status for several years but will concede that position to Ultrium in 2006. According to the report, by then, Ultrium will have a 38% market share, versus 33% for DLT.
As for the 8m m market, Abraham says recent softness in demand for Exabyte Mammoth has led to lower growth rates for that segment. However, he expects future demand for Sony AIT and Ecrix VXA libraries to re-invigorate growth rates. His forecast is particularly bullish for Sony AIT-2 due to emerging applications such as video recording. "None of the other technologies have moved into that space, which is a potentially large opportunity," he says.
Unit shipments for the 8mm market are forecast to increase from 11,000 units last year to more than 21,000 units in 2006, while revenue will nearly triple over the period, from $134 million to $315 million.
Abraham is also projecting growth for the helical-scan segment, which includes Sony DTF and Ampex 19mm products, though he says that the availability of DTF and 19mm autoloaders has curtailed demand for library products based on these technologies. In particular, Abra-ham says Sony DTF is doing well at the high end and has dropped its price to try to make a stake in more cost-sensitive midrange markets.
The helical-scan market is expected to have a CAGR of 7% over the forecast period, from 504 units last year to 670 libraries in 2006.
Of the remaining markets, DAT has probably fared the worst, says Abraham. Despite huge success on the desktop, DAT was not able to penetrate the library market. Similarly, the QIC library market never took shape, despite a field presence today of more than 14 million drives and several hundred million cartridges. Tandberg Data is the sole manufacturer of QIC drives and libraries. Last year, the company shipped about 250 libraries. Neither DAT nor QIC is included in Abraham's 2001 forecast.
As for what lies ahead, Abraham says it wouldn't be out of the question for Sony to spin off DTF or for IBM to replace its Magstar technology with an ESCON Ultrium drive.
Currently, 17 vendors manufacture libraries, down from 20 last year. Mountaingate, Aiwa, and Asaca stopped making libraries last year.
For more information, visit www.freemanreports.com.