Storage software market on the upswing

The storage software market generated revenue of $2.2 billion in the fourth quarter, continuing a healthy growth streak, according to data released Monday by IDC.

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The growth represents a jump of 15 percent compared with the same period a year ago, the market researcher said.

For the full year, revenue totaled $7.9 billion, an increase of 16.1 percent compared with 2003. IDC attributed the growth to higher investments in data protection and management, coupled with rising awareness of regulatory compliance issues.

EMC accounted for almost a third of the market in the fourth quarter, with $693 million in revenue and 31.7 percent market share. The company continues to capitalize on revenue from Legato, which EMC acquired in 2003.

Veritas--which announced last year it is to be acquired by Symantec--retained its No. 2 position with 21.7 percent market share.

Computer Associates International and IBM finished third and fourth, with 8.8 percent and 8.2 percent market share, respectively. Hewlett-Packard had a 6.6 percent share.

EMC and IBM posted the strongest quarterly growth, with 25.1 percent and 16.7 percent increases year-over-year, respectively, the market research company said.

Of the various segments of the storage software market, the storage resource management segment saw the biggest quarterly jump; it grew by 19.7 percent year over year.

The market for backup and archive software grew 9.5 percent in the same period. Storage replication tools and file system software also saw strong results--of 17.2 percent and 14.2 percent, respectively, IDC said.

"The strong growth rate for storage resource management is a result of the need to manage the increasing scale and complexity of storage systems, as well as the heterogeneous storage environment," Bill North, research director for storage software at IDC, said in a statement. "As traditional point-in-time backup and storage replication move closer together, these combined markets have contributed to the market's healthy growth in 2004."

IDC expects the overall market to continue in this direction during the next few years.