By Dave Simpson
-- Throughout 2008, the enterprise storage market proved surprisingly resilient compared to the overall IT sector (although spending started a steep slide in the fourth quarter). The outlook for enterprise storage in 2009 is, well, sketchy.
A recent Needham & Company report ("Enterprise Storage/DataCenter Tech Industry Outlook") sheds some light on what to expect this year, both in terms of spending and which technologies could (re-)fuel the storage industry. Not surprisingly, Needham analysts note that "there is significant uncertainty and lack of visibility in IT budgets, which ultimately underpin enterprise storage-related spending."
Market research firm IDC predicts flat to slightly increased (low single digits) IT spending in 2009, and Needham analysts anticipate short-term (perhaps quarterly) IT budgeting at many companies, with frequent revisions depending on how the year unfolds.
However, Needham expects the downturn in enterprise storage spending to be less severe than in the post dot.com crash of 2001/2002 (when some of the largest storage vendors experienced year-over-year revenue declines of around 20%) – unless there is yet another significant downturn in macro economic conditions.
Among the brightest storage technologies for 2009, Needham cites data de-duplication, compression, virtualization, thin provisioning, clustering, automated tiered storage, virtual tape libraries (VTLs), power-managed disk drives and arrays, and any technology that is in line with the general industry theme of "asset optimization."
Other trends and technologies that should prove hot in 2009, according to Needham analysts Glenn Hanus and Patrick O'Brien, include server virtualization influences on storage; cloud-based storage services and associated clustered storage platforms; broader application of data reduction technologies; growth in "content archiving" software driven by e-discovery and compliance; adoption of solid-state disk (SSD) drives in high-end disk arrays; the introduction of Fibre Channel over Ethernet (FCoE) products later this year; and increased adoption of 8Gbps Fibre Channel, 10Gbps Ethernet, and 6Gbps SAS.
Although most storage vendors had lackluster, or worse, revenue reports in 2008, Needham analysts note that a few vendors consistently exceeded 2008 quarterly expectations, with 2009 expectations intact. Examples: Data Domain and Compellent.