Storage an IT Bright Spot

Bloated databases and post-Enron regulations on records retention are among the many factors keeping the storage sector humming. After all, if there is one area where IT managers can least afford to flirt with obsolescence, it’s storage.

Increasingly, firms that offer a range of enterprise-class storage products and services are recording gains despite the economic doldrums that have gripped the tech sector.

Louisville, Colorado-based StorageTek , for example, saw first quarter 2003 revenue grow 5 percent to $480.0 million over the same period a year ago, according to financial results the company released today.

While revenue from storage products provided a minor uptick, most of the revenue growth came from the operation’s storage services. Revenue from StorageTek’s services marked a 12% increase over the same quarter in 2002.

Last week, EMC announced that a number of high-profile customers, including Bank of America and Warner Music Group, made purchases of the company’s automated networked storage offerings and thereby helped company post a $35 million profit for the first quarter of 2003, compared to a $77 million loss for the same period a year ago.

And last month, McData reported financial results at the high end of previous estimates, while McData’s recent success has been attributed largely to its partner strategy.

Computer Associates , the Islandia, NY-based software and services company, saw a 16% increase of storage management license revenue from 2001 to 2002, according to the Gartner Dataquest report “2002 Storage Management Software Market Share.” The same report singles out Computer Associates as the only independent storage management software provider in the global $4.7 billion dollar storage management market to post revenue growth in 2002.

While this trend favors full-service storage firms, companies with more narrow offerings aren’t faring as well. Network storage switch maker Brocade Communications Systems announced earlier this month that the company was shaving 9% of its workforce. Drive and storage tape manufacturer Seagate, while still profitable, saw its net income dip roughly 10% to $174 million in the first quarter of 2003 compared to the same period a year ago despite increased drive shipments. Another company, StorageNetworks, which specializes in storage management software, recently announced that two of its directors had quit and that it has hired an investment banking firm to “explore options.”

This story originally appeared on Enterprise IT Planet.

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