Storage management software market picks up

In the latest sign of a healthier technology spending climate, the market for software to manage data storage is bouncing back, according to researcher Gartner.

Worldwide sales of software for tasks such as data backup and recovery rose 7.9 per cent in 2003 to $5bn, Gartner said on Monday. The storage management software market had declined 5.8 per cent to $4.6bn in 2002, the first time it had dropped in revenue, Gartner said.

Gartner analyst Carolyn DiCenzo forecasts another expansion this year. "I'm expecting that the growth will be about the same this year," she said.

EMC ranked first in sales in 2003, with 28.3 per cent of the market. The Hopkinton, Massachusetts-based storage specialist made a strong push to expand its software offerings last year by acquiring companies such as Legato Systems, which makes data backup and recovery applications. EMC mainly sells data storage hardware.

Veritas Software held second place on Gartner's list, with an 18.7 per cent market share. IBM was third with 13 per cent market share, followed by Hewlett-Packard with 5.6 per cent and Computer Associates with 5.3 per cent. Of these top five, only IBM and HP gained market share last year, Gartner said, with HP bumping Computer Associates International out of the fourth spot.

The report comes on the heels of other upbeat news for technology vendors. Researcher IDC recently said spending on IT worldwide will rise 5 per cent this year, up from 2 per cent growth last year.

Last month, IDC said storage software revenue rose 8 per cent in 2003 to $6.29bn. The market jumped 18 per cent in the fourth quarter of the year, IDC said, thanks partly to efforts by companies to meet data-handling regulations.

Spending on storage software remains lower than spending on storage hardware, according to IDC. But software is becoming more central to organisations, as they seek to squeeze more out of their storage gear and cut administration costs.

Ed Frauenheim writes for CNET News.com.