By Heidi Biggar
Despite continued adoption of storage area networks (SANs) and network-attached storage (NAS) last year, unit shipments of tape libraries increased just 3% to 65,400 units, according to the recently published Freeman Report, 2003 Tape Library Outlook.
The flat economy and increasing pressure from a variety of new disk-based backup alternatives combined to give library vendors a run for their money last year. "On the positive side, SAN adoption drove library sales, as did NAS," says Bob Abraham, author of the report. "On the negative side, the economy was still a factor."
While the economy impacted virtually all segments of the tape library market last year, some were affected more than others. In particular, newer technologies like LTO fared much better than technologies such as DLT. "When the economy goes south, leading-edge technologies aren't affected as much as older technologies," says Abraham.
Abraham says that the poor performance of DLT/SDLT last year was the net result of two factors: the slow ramp up of SDLT drives/libraries and the overall aging of the DLT product set—in particular, DLT 7000 and DLT 8000. "DLT [as a product family] had a lot of momentum, but it was maturing and ramping down," he explains.
Meanwhile, due to its late market entry the year before, SDLT was in the unenviable position of playing "catch-up" to LTO, which got off to a very strong start.
LTO libraries first entered the market in 2000 with shipments from ADIC, IBM, PeAk Storage Solutions (formerly Breece Hill), Plasmon, and Qualstar. Last year, ADIC was the leading supplier of LTO libraries with 26.1% of total market shipments, followed by StorageTek (24.4%), Hewlett-Packard (21.4%), IBM (18.6%), and Quantum (5.2%), according to the report.
Shipments of LTO libraries rose 95% from 2001 to 2002, increasing to 25,719 units, and shipments are expected to increase 10% this year, rising to 59,800 units in 2008. In contrast, shipments of DLT/SDLT libraries fell 30% to 25,264 units last year, according to Abraham.
Propelled by these numbers, LTO became the volume library leader in 2002, ousting DLT/SDLT from the top spot. According to the Freeman Report, LTO libraries accounted for 39.3% of all library shipments in 2002, compared to 38.6% for DLT/SDLT. By 2008, LTO is expected to amass a 51.1% share of the market, compared to 29.9% for DLT/SDLT.
In terms of revenue, half-inch cartridge (i.e., IBM 3490 and StorageTek 9840/9940 libraries) edged out LTO for the top spot last year, with a 37% market share. However, Abraham expects the half-inch cartridge format to succumb its leadership position to LTO this year—and the number-two spot to DLT/SDLT in 2007.
LTO library revenue is expected to soar over the forecast period to $1.4 billion in 2008. DLT/SDLT library revenue, meanwhile, is expected to increase steadily over the period to $660 million. Half-inch cartridge library revenue is expected to decrease over the period.
While DLT/SDLT market share is expected to continue to erode over the forecast period, Abraham does expect some stabilization of the product family by year-end. He anticipates SDLT/DLT revenues to grow from $372 million in 2002 to $660 million in 2008.
As for other library types, 8mm finished the year up 16%, based largely on the strength of Sony's AIT technology, says Abraham. Unit shipments of 8mm libraries are expected to grow at a 9% CAGR pace over the forecast period, to 18,900 units in 2008. Revenue is also expected to increase through the period, from $110 million last year to $176 million in 2008, according to the report.
Abraham also expects Sony's SAIT libraries to make significant strides in certain market segments, particularly in the broadcast arena.
SAIT libraries, says Abraham, should stimulate the growth of the overall helical-scan library segment, which currently includes Sony DTF and Ampex DST tape technologies, as well as SAIT. Shipments of these low-volume, high-ticket libraries are forecast to increase from 360 units in 2002 to 1,555 units in 2008.
SAIT drives have already been integrated into libraries from Sony and Qualstar, and other vendors are expected to follow suit. "Anyone with a half-inch product is looking to integrate the new drive," says Abraham, "but issues with the drive's form factor could be a problem for some library manufacturers."
Sony began shipping volume units of SAIT drives this spring. The drives, which come in a 5.25-inch form factor, are not backward-compatible with AIT drives. They do, however, leverage many of the same technologies as AIT (see "The truth about tape: The market, opportunities, future," InfoStor, February 2003, p. 20).
Abraham says helical-scan technologies—in particular, Sony's SAIT—have excellent growth potential. At this juncture, the drive's capacity (an industry-high 500GB) is the driving force, and its performance (30MBps) is competitive, he says.
This month, Quantum is expected to ship the third SDLT drive: the SDLT 600. The new drive has a 300GB native capacity and a 34MBps native throughput rate and is equipped with a new set of management and diagnostic tools called DLTSage, which proactively monitor and assess the health of the drive and media.
SDLT 600 drives are backward read-compatible with SDLT 220 and SDLT 320 and can be integrated into existing libraries.
Also on the horizon is LTO-3, which could be demonstrated as early as the fourth quarter. This third-generation "super drive" will reportedly boast a 400GB native capacity and a 60MBps native throughput rate.
As for the threat of new disk-based backup devices, Abraham says it has been good and bad for the tape library market. "They will replace tape in some situations, especially where tape was used reluctantly. But 90% of users view disk-based alternatives for what they are—fast backup and recovery for short-term storage. In these cases, disk doesn't displace tape at all."
And while disk prices have dropped steeply recently, Abraham says users shouldn't expect to see any more quantum declines in the future.
He says tape and disk prices will each fall about 10% to 20% per year going forward.