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According to David Liff, regional vice-president of storage technology for Europe, Middle East and Africa at Computer Associates, 2002 will be a major year for the data storage sector as companies concentrate on core activities such as their e-business infrastructure.
"Companies are now focusing on working with the resources they already have rather than investing in new infrastructure. This means that there is now much more awareness among businesses about the need to manage and store their data properly so that electronic information is made available to their employees quickly and reliably," he told ElectricNews.Net.
One of the reasons data storage is to come to the fore in 2002 is that a major problem for many businesses is the rate at which data is growing within their organisations. IDC estimates data growth at around 80 percent per year with much of this attributable to the increased use by employees of the Internet, e-mail and media rich application software. From 184,641 terabytes (TB) of stored data worldwide in 1999, IDC predicts that new data storage will grow to almost 2,000,000 TB by 2003.
As a result of these increases, IDC predicted that worldwide spending in the storage service provider market would increase at a compound annual growth rate of 134 percent, from USD153 million in 2000 to USD10.7 billion in 2005.
The events of 11 September are also seen as a factor as companies realised the importance of backing-up data properly and securely. However, Ashley Robinson, marketing manager for Northern Europe with network data storage and content delivery company Network Appliance, told ElectricNews.Net that businesses were already working on improving their data storage prior to 11 September, but he added that the events have sharpened their focus.
The markets have already begun to look favourably on data storage companies following slumps in their share prices in 2001. On Thursday, shares in EMC and Network Appliance rose on the New York Stock Exchange and the Nasdaq respectively after brokerage Salomon Smith Barney recommended buying EMC, citing a recovery after sharp losses in the third quarter.
EMC shares rose USD1.79, or 12.09 percent, to USD16.59, while Network Appliance increased 13 percent or USD3.11 to USD26.89. Storage networker Brocade Communications Systems also climbed 10 percent on the Nasdaq to USD39.01.
Salomon analyst Clinton Vaughan said in a research note he was upgrading EMC's stock rating to "buy" from "outperform" as the worst was over for the company. He also said EMC was on the verge of new product releases and partnership agreements, and expected the company's recovery to begin in the first quarter and to be completed by the fourth.
The news will be greeted with some relief by EMC's Irish employees. Based in Cork, EMC's Irish facility employs 1,600 people. EMC struggled during 2001 and was forced to lay-off 10 percent of its 23,000 strong workforce. Although no jobs were lost in Ireland, employees here had to take two weeks unpaid leave in late 2001 or early 2002 in order for job cuts to be avoided.
The last year, however, was a better one for Irish data storage solutions and service provider Xnet. Over the last three years it has had a growth rate of 542 percent and in 2001 it was named in Deloitte & Touche UK and Ireland's Technology Fast 50. The company currently employs 35 people at its Wicklow headquarters.
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