Data Storage Software Sales Hang On -

Data Storage Software Sales Hang On

The market for data storage hardware may be suffering through its first slump in more than five years, but the market for storage software is hanging on — barely.

EMC (NYSE: EMC), Symantec (NASDAQ: SYMC) and IBM (NYSE: IBM) managed to grow their storage software sales in the fourth quarter, IDC reported today, while NetApp (NASDAQ: NTAP), HP (NYSE: HPQ) and CA (NYSE: CA) suffered modest sales declines.

Overall, the data storage software market grew for the 21st straight quarter to end 2008, but like the hardware side of the business, vendors have had to contend with a sharp slowdown from the double-digit growth rates enjoyed in recent years. The storage software market grew just 3.6 percent year-over-year to $3.03 billion in the fourth quarter, IDC reported.

EMC once again held onto the top spot in the overall market, with a 26 percent revenue share and 4.2 percent revenue growth. Symantec (NASDAQ: SYMC) was once again second, with an 18.3 percent market share and a 6.9 percent growth rate.

IBM had the strongest quarter of the top vendors, growing sales 10.1 percent and coming in third with 13.2 percent of the market. NetApp came in fourth at a 7.5 percent share, while HP and CA took 4.5 percent and 3.7 percent of the market, respectively. NetApp, HP and CA each saw a sales decline of about 5 percent in the quarter.

Data protection and recovery, file system software and archiving were the strongest segments of the market, according to IDC.

But while year-over-year comparisons are holding up, the market was flat from the third quarter to the fourth quarter, and the two largest segments — data protection and recovery software and storage replication software — dipped slightly between the third and fourth quarters.

"The storage software market is starting to exhibit more of an impact from the economic trouble," IDC storage software research analyst Michael Margossian said in a statement. "Even with the usually strong fourth quarter, most vendors showed signs of slowing down, and in some cases declining year over year."

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