Storage Software Market Heats Up

EMC maintained the top spot in IDC’s Worldwide Quarterly Storage Software Tracker in the third quarter, while Veritas and IBM lost market share.

And of the top five vendors, CA and HP boasted the strongest growth in the quarter, up about 30% each from the year-ago quarter.

Behind the shifts was a surprisingly strong market for storage software in general: IDC said the worldwide storage software market surpassed $1.9 billion in quarterly revenue for the first time in the third quarter, surging 19.1% year over year.

“Spending for storage software reached a record high during the third quarter as the market continued its sustained double-digit growth pattern,” said Bill North, director of storage software research for IDC. “Storage capacity requirements and complexity continue to grow while system costs steadily decline.”

North said that customer investment in storage software grew to almost $36 for every $100 spent on storage systems. “This is indicative of the increasing value customers are placing on the software that allows them to effectively manage and protect business information assets,” he said.

All of the major storage software functional markets posted double-digit year-over-year revenue growth in the third quarter. The storage resource management market posted the largest gain at 27.3%, while the back-up and archive software market continued to represent the largest functional market, growing 17.4% year over year. The storage replication software and file system software markets grew 13.7% and 10.3%, respectively.

EMC (the combined results of EMC and Legato) grew 22.7% year over year to lead the overall market with 31.8% revenue share, gaining the most market share among the top five vendors. Veritas maintained its second position with 21.7% revenue share, growing 12.7% year over year. CA edged out HP and IBM for the third position with 8.8% revenue share. HP and IBM finished in a statistical tie for the fourth position, with 7.6% and 7.1% revenue share, respectively, IDC said. HP and CA posted the strongest results among the top five vendors, with 30.2% and 29.1% year-over-year growth, respectively.

Veritas put out its own release on the results, announcing that it maintained its position as the top supplier of backup and archiving software and file system software in the third quarter.

Veritas said it holds 40.4 percent revenue share in backup and archiving storage software, compared to 19.1 percent for its nearest competitor (CA) and 11.8 percent for the third-ranked company (EMC).

Top 5 Vendors, Worldwide Storage Software Revenue Third Quarter of 2004 (Revenues are in millions)
Vendor	Q3 2004 Revenue	Market Share	Q3 2003 Revenue	Market Share	Revenue Growth 3Q04 / 3Q03
EMC(a)	$608	31.8%	$495	30.9%	22.7%
VERITAS	$415	21.7%	$368	23.0%	12.7%
Computer Associates	$169	8.8%	$131	8.1%	29.1%
Hewlett-Packard	$146	7.6%	$112	7.0%	30.2%
IBM	$136	7.1%	$134	8.3%	2.0%
Others	$438	22.9%	$364	22.7%	20.2%
All Vendors	$1,911	100%	$1,604	100%	19.1%
Notes: (a) EMC figures reflect the combined results of EMC and Legato. Source: IDC Worldwide Quarterly Storage Software Tracker, 3Q04, December 13, 2004

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