Storage spending to increase in 2006

Posted on December 28, 2005

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By Dave Simpson

December 29, 2005—According to a recent survey of IT professionals conducted by Robert W. Baird & Co., end-user spending on storage will pick up steadily in 2006. For example, 78% of the survey respondents expect spending on disk storage to be the same or higher than in 2005, with 58% of the enterprises increasing spending by at least 3%.

More specifically, 19% of large enterprises and 42% of small enterprises (less than $1.6 billion in revenues) expect storage spending increases of greater than 6% in 2006. Baird analysts note that the adoption of blade computing and server virtualization is driving demand for Fibre Channel storage and SANs.

Among companies of all sizes, only 2% expect storage spending decreases of more than 6%, and another 20% predict spending decreases ranging from 3% to 5%.

Surprisingly, as in other independent surveys, the tape market appears to be showing resilience despite pressure from disk-to-disk alternatives for backup and recovery. For example, in the Baird survey 75% of the companies planned to spend the same or more on tape in 2006; 45% plan to spend at least 3% more on tape; and only 25% plan to spend less on tape in 2006.

Smaller enterprises are more likely to increase spending on tape. For example, in the Baird survey 60% of the smaller enterprises plan increases of at least 3% in tape spending in 2006.

When asked which company will be their top strategic storage hardware vendor in 2006, 35% of the survey respondents cited EMC, followed by Dell (30%), Hewlett-Packard (30%), IBM (23%), Sun (14%), Network Appliance (9%), and Hitachi Data Systems (7%).

When asked which storage vendor had the most momentum going into 2006, users cited IBM and EMC as the leaders in a virtual tie, followed by Dell and Network Appliance.

In terms of storage technology trends, users ranked disk-to-disk backup/recovery (with an emphasis on virtual tape libraries, or VTLs) in the top spot, followed by tiered storage. End users also ranked virtualization as a high priority, although in the Baird survey that included both server virtualization and storage virtualization.


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