Small & Medium Business Data Storage Market Entering Accelerated Growth Phase

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Annual worldwide spending on data storage hardware, software and services by Small- and Medium-sized Businesses (SMBs) will undergo phenomenal growth over the next 4 years, more than quadrupling to $18.5 by 2006, according to a new report from Access Markets International (AMI) Partners, Inc., an industry leading authority on SMB Information Technology (IT) research and consulting.

According to the report, worldwide SMB storage spending will grow at a compounded rate of 43% over the next 4 years, far outpacing the 5% annual growth rate in large enterprise storage spending, and positioning the under one thousand employee segment to be the key contributor to industry growth over this time period. At this substantial pace, total worldwide SMB spending will increase from just 8% of the $54 billion storage market today, to 24% of the projected $79 billion market in 2006.

“As storage vendors seek new avenues for meeting and exceeding their revenue goals in a challenging economic environment, expanding into the SMB market is a logical and perhaps necessary step,” said Ryan Brock, a senior consultant with AMI-Partners. “Those competitors that are able to swiftly and decisively deploy resources and go-to-market strategies that demonstrate a keen understanding of the SMB space will undoubtedly garner financial rewards,” added Brock.

Over the next 4 years, all of the major global regions are expected to contribute to outstanding growth in storage solution deployment among SMBs. SMB markets in Latin America and Eastern Europe, Middle East, & Africa (EMEA) will experience the highest compounded annual spending growth rate, at 55%, followed by Asia Pacific at 50%, and North America and Western Europe at 40%. North America will remain the top market from a total dollar spend perspective, accounting for roughly 40% of worldwide SMB storage spending, followed by Western Europe at about 35% and Latin America, Asia Pacific, and EMEA together accounting for the remaining 25%.

The number of SMBs with some type of networked storage solution, which includes storage area networks (SAN) or networked attached storage (NAS), currently stands at 1.5 million and is expected to grow to almost 6.8 million businesses by 2006. Although this uptake is substantial, these businesses will represent only 8% of all SMBs across the globe. As such, a prerequisite for successfully competing in the global SMB storage market will be the ability to pinpoint these segments and recognize the factors that will lead these businesses to seek storage solutions.

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