Tape Storage Market Revenue Quantum Leaps into Network Storage
Quantum Corp. (www.quantum.com) launched an initiative to expand its presence in the tape automation and hard drive disk market with new storage products.
Best known for its DLTtape drives, Quantum, which currently has an installed base of a million drives, is developing hybrid combinations of disk and tape storage within a single system as part of its thrust into storage area networks. The company plans to begin shipping these products by the end of the year, according to John Gannon, president of Quantum's hard disk drive group.
Quantum also announced plans to enter the emerging market for network-attached storage appliances later this year. The company did not provide details about any products, which are frequently aimed at the workgroup level.
Quantum bought its way into the tape library market by acquiring ATL Products Inc. (www.atlp.com) last September. Gannon maintains that Quantum's strategy has been to provide end-to-end storage management products. "It's a continuation of a diversification of our business that we began back in 1994 with the acquisition of Digital Equipment's storage business," which included a range of high-end disk drives and DLTtape drives.
The new thrust into end-to-end storage solutions beyond tape drives will put Quantum in direct competition with its DLTtape resellers. This mix of competition and cooperation, however, is the norm in the storage industry, says Alexa McCloughghan, senior vice president at International Data Corp. (www.idc.com). "It's expensive to develop storage products. There's a lot of partnerships and alliances that have been formed between competitors -- boundaries are blurring."
In fact, the company "has established a very clearly defined arm's-length working environment within Quantum that allows us to deal with ATL as a customer," Gannon says. "Our strategy is not to take business away from our competitors. By expanding the number of products in our portfolio, we will have more products that we can take to both our OEMs and resellers."
An increased range of offerings will enable Quantum to compete with storage giant IBM at more levels as well, McCloughghan points out. The competing LTO format -- fielded by IBM Corp., Seagate, and Hewlett-Packard -- "was a direct shot across the bow of DLT," she notes.
Quantum also announced it is developing system software to provide intelligence in future storage systems and storage devices, including self-configuring disk-drive appliances that operate within Sun Microsystems' Jini network architecture. While Quantum will target Windows NT storage needs, Quantum's strategy also is focused on developing storage management systems that run on Java Virtual Machine. "Windows NT systems administrators will benefit because this opens up levels of flexibility that have not been there before," Gannon says. "However, this is not an NT-centric strategy -- this is a storage-area-network and network-attached storage strategy."
Quantum's New SplitDLT and Storage SystemsDLTtape systems
Tape libraries (ATL Products Inc.)
Hard Disk Drive GroupDesktop hard disk drivesHigh-end hard disk drivesSolid state disk drives
Climbs in 1998
The worldwide tape drive market grew 6 percent in 1998 to $3.3 billion in OEM value, according to International Data Corp. (IDC, www.idc.com).
The revenue gain came despite a 5 percent decline in unit shipments, to 4.7 million units, due to the transition of tape storage solutions from desktop to server, says Robert Amatruda, senior analyst for IDC’s Storage Mechanisms group.
The DC2000 segment kept the unit volume lead despite a near 20 percent drop in shipments from 1997 due in large part to heavy pressure from removable magnetic products such as the Iomega Zip drive. At 1.9 million units, DC2000 represented 41 percent of all tape drives shipped and 8 percent of "if sold OEM" value, a convention for tracking the amount manufacturers charge resellers for hardware. Vendors are repackaging DC2000 as a file-and-print product for PC servers, an effort IDC believes won’t fully offset the market decline. In the DC6000 segment, also moving off the desktop, shipments dropped 7 percent as "if sold OEM" market value fell 4 percent.
Tape products showing growth in 1998 included 4mm, 8mm and DLTtape. The worldwide 4mm market surpassed $1 billion in "if sold OEM" value and 1.8 million drive units. "If sold OEM" revenue for 8mm rose 7 percent and shipments grew 8 percent. Quantum Corp.’s DLTtape emerged as the de facto standard tape technology for the mid-range, IDC reports. DLTtape "if sold OEM" value rose 30 percent to $983 million.
By vendor, IDC ranks Hewlett-Packard Co. first in units shipped, followed by Seagate, Iomega, Quantum and Sony.
IDC: 1998 Disk Storage System Revenue Growth Up
Disk storage system revenue growth had a strong 1998, but should slow slightly in 1999, according to research from International Data Corp. (IDC, www.idc.com).
The market, however, will return to double-digit revenue growth in 2000 behind a surging Windows NT storage market, IDC predicts.
Overall disk storage system revenue climbed 11.9 percent from 1997 to 1998, bringing in $27.7 billion last year, IDC reported in its Disk Storage Systems Year-In-Review bulletin.
"More than any prior year, 1998 was a year for focus on the storage business for server and network solutions suppliers," said John McArthur, director of IDC’s Storage Systems Research group, in a statement. Factors leading vendors to focus on storage included shrinking server margins and the realization that the server companies had a captive but underused distribution channel, McArthur said.
IDC expects the rate of revenue growth to moderate in 1999 to 8.4 percent because of heavy buying in 1998, redeployment of storage used for Y2K testing and a desire to delay discretionary purchases until after Jan. 1, 2000. IDC’s forecast beyond 2000 calls for revenue growth rates to bounce back past double digits.
Windows NT and Windows 2000 should remain the fastest growing market with a 30 percent compound annual growth rate forecast from 1998 through 2002, IDC says. Microsoft Corp.’s operating system will become the biggest disk storage systems market in 2002 with a 38.6 percent revenue share, according to IDC projections. IDC expects Unix to grow at a more modest compound annual growth rate of 8.8 percent, and hold a 35 percent revenue share in 2002.
Top Storage Suppliers in 1998
The top seven disk storage system suppliers hold nearly 68 percent of their market, according to IDC. Here’s how they fared in 1998:
- Compaq Computer Corp. bought Digital Equipment Corp. to surge into the lead with a 20 percent share and $5.5 billion in revenue.
- IBM Corp. dropped to second place with a 14.3 percent share and $4 billion in revenue.
- EMC Corp. jumped 1.7 percent in revenue share growth to finish the year with an 11.5 percent share at $3.2 billion.
- Sun Microsystems Computer Co. launched a Network Storage Division and retained the No. 4 spot with a 7 percent share and $1.9 billion in revenue.
- Hewlett-Packard Co. increased the storage capabilities for its server families to grow its revenue share to 6.6 percent on $1.8 billion in revenue.
- Hitachi had flat revenue due to heavy discounting and the decline of the Japanese economy, ending the year with a 5.1 percent share and $1.4 billion in revenue.
- Dell Computer Corp., with shipments almost entirely within the two fastest growing operating environments of Windows NT and Novell, captured a 3.4 percent share and $946 million in revenue.