Storage spending according to TIP

Amid the general doom and gloom in the IT industry, the storage segment is showing some signs of surprising resiliency. Then again . . .

On the down side, a recent storage spending survey of Fortune 1000 managers conducted by TheInfoPro research firm, shows that storage budgets will decrease 14% on average in 2009.

In addition, 68% of the companies expect to spend less in 2009 vs. 2008, with only 21% of all respondents planning to spend more than $10 million (remember, all respondents were from Fortune 1000 firms) – which is about a 10% drop from 2008.

Other key findings from the TheInfoPro survey:

--32% of the respondents spent less in 2008 compared to what was originally budgeted
--32% expect to spend the same or more in 2009 vs. 2008 – down from 81% in the 2008 vs. 2007 period.

The main culprit, of course, is the macro economic malaise, but TheInfoPro CEO (and fellow Boston College alumnus) Ken Male also notes that “Excess capacity and the procurement of low-cost tiers of storage have also contributed to the considerably lower Q4 ‘budget flush’ that we’re witnessing compared to previous years.”

On the positive side, Gartner’s Q3 2008 revenue stats for the external controller-based disk storage market (aka disk arrays) is somewhat upbeat. For example, revenue totaled $4.3 billion in the third quarter, a 10% increase over Q3 2007. However, when comparing Q2 and Q3 of 2008, worldwide revenues declined 4.5%.

For those keeping score, the leader board in the disk array market (with market shares in the third quarter) goes like this: EMC (26.1%), IBM (13%), HP (11.3%), Hitachi Data Systems (9.8%), Dell (8.9%), NetApp (8%), Sun (4.3%), Fujitsu (2.5%), and “others” (16.1%).

In another gloomy end-of-year report, investment analysts at Needham & Company lead off with this: “After a year of acting as grief counselors as much as research analysts, we welcome the arrival of a new year. The bad news is that we expect the first half of 2009 (and in particular, Q1) to see a dramatic decline in IT spending.” The Needham analysts are predicting a 2% to 3% overall increase in IT spending in 2009, noting that it will be heavily weighted toward the second half of the year.


posted by: Dave Simpson

Dave Simpson, Editor-in-Chief
by Dave Simpson

Dave Simpson has been the Editor-in-Chief of InfoStor since its inception in 1997. He previously held editorial positions at publications such as Datamation, Systems Integration, and Digital News and Review. He can be contacted at dsimpson@quinstreet.com

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