Storage vendors hurt badly by recession

EMC’s latest earnings report illustrates the trouble experienced in the storage market this year, but some analysts are hopeful data storage vendors will make a comeback by the end of 2009.

Share

EMC’s latest earnings report illustrates the trouble experienced in the storage market this year, but some analysts are hopeful data storage vendors will make a comeback by the end of 2009.

EMC’s second-quarter net income fell 43 percent year-on-year, and revenue fell 11 percent, the company reported this week. Seagate Technology on Tuesday, meanwhile, reported a net loss of $81 million in its most recent quarter.

A year ago, the storage market seemed to be thriving in a down economy, with analysts saying the pressing need for disk space was overriding IT spending concerns. But times have changed for the storage market, just as they have for the rest of the IT industry.

“When we went into the year, we probably couldn’t have and wouldn’t have predicted the first half to be as negative as it has been,” IDC analyst Benjamin Woo said.

IDC reported in June that worldwide factory revenue for disk storage systems has dropped 18.2 percent in a year, even though the total capacity of shipped disk storage systems grew 14.8 percent.

"The disk storage system vendors are really seeing the impact of the global economic downturn in the first quarter revenues," Steve Scully, IDC’s enterprise storage research manager said at the time.

Storage could actually be seen as a bright spot compared to the server market, in which first quarter revenues were 24.5 percent lower than the previous year.

“When you compare storage to the rest of the ICT [information and communication technology] area, I think you’ll find that storage weathered the whole downturn better than many other sectors,” Woo said.

 
#renderView(view="/XSiteincludes/coldbox-views/tracking/twitter", args={ident="nvk5o"})# #renderView(view="/XSiteincludes/coldbox-views/tracking/linkedin", args={id="116509"})#