Storage Market Growth a Sign of Industry Deficiencies?

By | Sep 13, 2012

After taking some strong hits last year due to manufacturing issues, the market for digital storage is roaring back to life with impressive growth numbers and strong signs of a bright future. While good news on its own, the market's surge does bring up some interesting questions about how businesses, especially in the midmarket, are handling data in the era of cloud computing.

Storage Market Growth

Last year, the disk-based storage industry found itself at a crossroads as floods in Thailand ravaged a large percentage of the industry's manufacturing base. Now, it appears as if the market is on the verge of something big.

According to the research firm, Gartner, and reported in this eWeek article, the worldwide external disk storage revenue grew to almost $6 billion in the second quarter of 2012, an increase of 6.7 percent over revenues from just one year ago. These new numbers also highlight the fact that this sector has seen 11 consecutive quarters of revenue growth.

These numbers were echoed by IDC, and reported in this heraldonline article. IDC also added that the total disk storage systems, which includes controllers, cables, and host bus adaptors, saw revenue grow to just over $8 billion, a year-over-year rise of 8 percent.

The growth was pretty much across the board for the major players in this space. EMC continues to lead in both external disk storage and total disk storage systems, with double-digit growth in both segments. IBM, NetApp, HP, Dell, and Hitachi all saw significant growth in the quarter, especially in the total disk storage systems segment.

Overall, vendors shipped an astonishing 6,667 petabytes of storage, representing a 24.8 percent growth over last year.

The Storage Market and the Future of Technology

Taken on their own, these types of growth numbers shouldn't be all that surprising. There are plenty of segments of IT growing at similar rates. But when looked at within the conditions of the real world--an almost complete shutdown of disk-based storage manufacturing for a time last year and significant economic hardships in many of the leading IT countries--these numbers predict even more astonishing growth in the future.

Obviously the growth in complexity of IT as a whole, combined with the recent explosion of cloud computing, has created a need for this enormous amount of storage, but one now has to wonder whether businesses are being smart about how they accumulate data, or if they are just trying to hold onto every piece of information that they can.

Data storage certainly isn't cheap, whether it's done in the data center or in the cloud. Even archival storage can start to get expensive after a few years. Businesses in the midmarket that are steadily increasing the amount of data they gather and store are about to be in for some surprising bills.

The whole purpose of this data is to analyze it. While the data analysis aspect of IT has certainly grown over the past few years it has not kept pace with the rate of data storage. This means that businesses are accumulating data in the hopes of one day being able to garner actionable data from it and are willing to foot a sizable bill until they do.

The realities of the modern marketplace prove that margins matter. Midsize businesses that are accumulating data at a rate, or in a manner, at which they cannot analyze it are simply wasting money. It is far better to simply handle a small amount of data that you can analyze than to accumulate massive amounts of data in hopes of one day finding a way to make sense of it.

So while the storage industry is booming, now is the time for midsize business to take a look at their data and start moving toward a better understanding of it rather than just accumulating it.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.

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