Storage Analysts See Solid 2006
Analysts from Robert W. Baird & Co. are predicting a solid year ahead for the storage market.
In the last two weeks, Baird analysts Daniel Renouard, Frank Timons and Joel Inman surveyed 44 enterprises about their 2006 hardware budgets, technology, trends and vendor opinions. Among the respondents, they found "a reasonably healthy enterprise demand environment" for hardware in 2006.
Spending priorities for next year include security, storage, and server/storage consolidation, and disaster recovery/backup and new hardware infrastructure also figure prominently in enterprise spending plans.
The results were most positive for EMC, IBM, Dell, Symantec/Veritas and Network Appliance, while Sun's results "provide hope for the beaten-down vendor," they wrote. Bright spots include disk storage, tape and servers. 87% of respondents expect 2006 IT budgets to be flat or higher, and 53% expect them to grow by at least 3% over 2005.
Storage was the healthiest market in the survey, with 60% of enterprises increasing disk storage spending by at least 3%, and a third by more than 6%. 18% of large enterprises and 36% of small enterprises are planning for greater than 6% increases in storage budgets. The analysts said the finding "bodes particularly well" for EMC, Network Appliance, Emulex, QLogic, McData and Brocade.
Tape Alive and Well
Surprisingly, despite a year of high-profile data tape losses, "the tape market is showing resilience," Baird said, with 77% of users planning to spend the same or more on tape than they did in 2005, and 44% planning to spend at least 3% more. The finding contrasts with the firm's mid-year survey that found 48% of respondents planned to spend less on tape products in 2005 as they shifted spending to lower-cost disk technology such as SATA.
Tape budgets at small enterprises are robust, with 62% planning on increasing tape budgets at least 3% over 2005 levels. The Baird analysts called the results "a modest positive" for IBM, Sun/StorageTek, ADIC, Overland and Quantum, but added: "We believe the emergence of low-cost disk solutions in the backup environment has and will continue to limit tape market growth in 2006, which in turn will hurt growth prospects for tape automation vendors."
EMC was cited as the IT vendor with the most positive momentum, thanks to product breadth, customer service capabilities and strategic offerings, followed by IBM and Dell. Enterprises selected HP as having the most negative momentum, the analysts said. Sun had a net negative score, but that was a marked improvement from prior surveys. EMC received comparable scores from both large and small enterprises, while Dell performed better with larger enterprises and IBM received better scores from smaller enterprises.
The analysts noted that NetApp was "relatively underrepresented, with only 13 of our 44 end users indicating that it was an applicable vendor. The lack of penetration is not unexpected given the current size of the company. We expect NTAP's installed base to continue to grow in 2006, and believe the IBM relationship should help increase NTAP's reach."