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Tag: economy

  • Disk Storage System Sales Badly Impacted By Economy


    Worldwide external disk storage systems factory revenues fell 13.6 per cent year-on-year to USD $4.2 billion in the first quarter of 2009 (1Q09), according to IDC.

    For the quarter, the total disk storage systems market declined to USD $5.6 billion in revenues, an 18.2 per cent decline from the prior year’s first quarter.

    Steve Scully, research manager, Enterprise Storage at IDC, said the results were driven by continued weakness in server systems sales.

    He said total disk storage systems capacity shipped reached 2,146 petabytes, growing 14.8 per cent year over year.

    "The disk storage system vendors are really seeing the impact of the global economic downturn in the first quarter revenues," he said.

    "However, while total revenues declined year over year, the overall storage capacity shipped continued to grow.

    "These contrasting results are due to a combination of currency implications, lower overall sales, shifts in product mix, and aggressive pricing actions."

    Liz Conner, research analyst, Storage Systems, said that although the economic crisis was fully realized by the enterprise storage systems market in the first quarter of 2009, the quarter wasn’t without its bright spots.

    "Entry-level price bands ($0K – $14.99K) showed 9.9 per cent year-over-year growth and the midrange price band ($15K – $49.99K) was flat year over year," she said.

    This supported IDC’s belief that storage products are still in demand, according to Conner, adding that customer spending was trending towards more modular, price point options.

    "In addition, the high-end price band ($300K-499.99K) saw a 14.5 per cent year-over-year growth as vendors discounted their very high-end products, shifting the ASV’s into lower price bands in order to meet the demand for high-end storage while accounting for reduced IT budgets," she said.

    EMC maintained its lead in the external disk storage systems market with 20.7 per cent revenue share in the first quarter, followed by HP and IBM in a statistical tie for the second position with 11.5 per cent and 11.3 per cent revenue share, respectively.

    Dell and Hitachi finished the quarter in a statistical tie for fourth place with 9.8 per cent and 9.4 per cent revenue share respectively.

    The total network disk storage market (NAS Combined with Open SAN) had year-over-year growth of minus 12.5 per cent in the first quarter with more than USD $3.1 billion in revenues.

    EMC continues to maintain its leadership in the total network storage market with 26.0 per cent revenue share, followed by NetApp with 12.0 per cent revenue share.

    In the Open SAN market, which declined 14.3 per cent year over year, EMC lead with 21.9 per cent revenue share.

    The NAS market declined 6.7 per cent year over year, led by EMC with 39.0 per cent revenue share and followed by NetApp with 28.7 per cent share.

    The iSCSI SAN market continued to show strong momentum, posting 40.5 per cent revenue growth compared to the prior year’s quarter.

    Dell led the market with 36.4 per cent revenue share, followed by EMC with 15.8 per cent.

    Natalya Yezhkova, research manager, IDC Storage Systems, said price sensitivity was a big factor in the healthy growth of iSCSI SAN.

    He said that was the only installation environment segment that ended the quarter in positive territory.

    "While still a relatively small segment of the market, iSCSI SAN is the bright spot for end users and for vendors, as it helps end users to deploy network storage, often with enterprise-class functionality, at a lower price point than traditional FC SAN, and, thus, creates more selling opportunities for vendors," he said.

  • How Is The Economy Affecting the US Storage Sector?


    Despite the global economic downturn it appears the US storage sector will continue to remain as busy as ever.

    The need to store increasing volumes of digital files – and to provide continuous access to them – seems to be keeping the industry buzzing with activity, writes Vanitha Vaidialingam for storage-biz.news.

    Most organizations are poor editors of digital information.

    The tendency is to retain everything and add to storage rather than spend the time and effort in weeding out and disposing of digital information that is irrelevant or redundant.

    Moreover, finding time and human resources for such second tier jobs is difficult.

    There is also the latent conviction that the new US federal court rules and other state and national regulations may require a business to produce the data at some future date.

    So, enterprises are more likely to retain the data for legal reasons than they were in the past.

    Benjamin Woo, of IDC Storage, takes an optimistic view of the outlook for the storage industry.

    "Despite the downturn in the macroeconomic conditions, our consensus is that in the short to medium-term, storage is the most resistant to macroeconomic changes," he said.

    "While there is no doubt that there will be some form of pull-back on storage investment, many of the large financial institutions, especially JPMorgan Chase and Bank of America – but also Wells Fargo and Barclays – will need to commit, or in the case of Chase, maintain, substantial IT and storage investment in the next six to 12 months, for integration of their acquired banks."

    Woo said that, while most companies will go into a capital conservation mode in the long term, they too must consider subscription storage models that are offered by online storage providers.

    The indications are that the slowing down of the economy will have its impact on the storage market initially but it will rally over time.

    The optimistic assessment in the industry is that IT organizations will move from building infrastructure to modifying infrastructure and efficiency improvement.

    This, in turn, will revitalize the storage market.

    Moreover, as companies struggle to survive, the cross currents of legal actions will tend to increase, and storage products that cater to legal discovery will drive the growth in the storage market.

    Greg Schulz, founder and Senior analyst of the StorageIO Group, said the focus will be on storage technologies "that can do more in a smaller footprint – that footprint being power, cooling, floor-space, and time in a given density.

    "This means servers [will be needed] that can do more work in a smaller space, storage for active data that can do more IOPS or bandwidth or files or e-mails or videos streamed per watt in a given footprint.

    "Or, for inactive and idle data, more capacity in a given footprint and cost point [will be desirable]."

    What will really happen, will be decided in the womb of time.

    However, there appears to be a general conviction that the storage industry’s optimism is not misplaced.

  • Economy To Slow VoIP Growth in US Business Markets


    The struggling economy will slow the growth of VoIP, but deployments remain wide-ranging at mitigated levels.

    So says In-Stat in a report that also found just over a third of US businesses that have deployed VoIP use it exclusively.

    Many more businesses use VoIP as a partial voice solution – and they are also beginning to embrace voice-enabled IM capabilities, particularly among younger workers.

    David Lemelin, In-Stat analyst, said IP continues to be a partial voice solution for most businesses with VoIP, particularly among larger businesses.

    "Therefore, there is significant room for growth even among businesses that have already adopted it," he said.

    Recent research by In-Stat found the following:

    • 32 per cent of Enterprise size businesses say the economic situation has slowed their VoIP deployment plans.
    • Broadband IP Telephony remains the most common carrier-based business VoIP solution with revenues exceeding USD $1.1 billion in 2008, compared to USD $857 million for hosted IP Centrex service within the US.
    • Adoption varies significantly by size of business, with Enterprise businesses preferring a partial deployment, while SOHO businesses are more likely to go IP-only.
    • 13 per cent of US businesses use both carrier-based and premises-based IP solutions.
    • Digital visual interface (DVI) and high-definition multimedia interface (HDMI), are related, high-bandwidth, unidirectional, uncompressed digital interface standards.

  • Growth of Mobile Content and Services Sector Threatened


    The UK’s mobile content and services market could be in for tough times if research from mobile research and analyst house Direct2 Mobile bears out.

    Its survey found that over 7 per cent of consumers have stopped, or intend to stop, their spend on content and services until better economic conditions emerge.

    D2M said that figure represents 3.96 million users – or almost 50 per cent of the existing mobile content and service user base.

    Nearly a fifth of respondents (17.8 per cent of men / 16.3 per cent of women) – or around 10 million users – said they will not subscribe to mobile content and service subscriptions, such as mobile Internet access, mobile TV and mobile music services, until the economic environment changes.

    Nick Lane, chief researcher at D2M, said the glass is half full for the mobile operators and half empty for the mobile content and service industry.

    "As almost half the advanced data users are reverting to talk-and-text only usage, the mobile entertainment companies should remain vigilant for the foreseeable future," he said.

    "And with 20 per cent of the UK’s mobile population unlikely to subscribe to mobile data subscription services during the recession, it threatens to seriously impact on growth in the mobile content and services sector."

    The UK mobile entertainment market was worth approximately UKP£505.8 million in 2008, according to D2M.

    The survey, conducted by Lightspeed Research, asked a representative sample of 1,000 UK consumers about their changing spending attitudes and habits on mobile.

  • Slower Growth Expected In IP Contact Center Market


    Global economic problems will cause a slowdown in spending in the IP contact center (IPCC) market in 2009, according to Infonetics Research.

    The communications market research firm reports that while the overall Unified Communications and IPCC markets will experience a downturn, the IPCC and communicator segments will weather the economic downturn better than others.

    Infonetics said sales of UC products ended mixed in 2008, with unified messaging platform sales up and communicator software sales flat.

    Matthias Machowinski, analyst, Infonetics Research

    Overall, the IPCC market finished 2008 up 37 per cent over 2007, with many vendors reporting robust sales, particularly in Asia Pacific.

    Worldwide, businesses bought USD $851 million in IP contact center equipment in 2008, up 37 per cent from USD $622 million in 2007, based on the report.

    The 2008 numbers are based on actual sales numbers for the first half of the year and projections for the second half.

    Current economic conditions make repeating this level of activity virtually impossible.

    Matthias Machowinski, Infonetics Research’s directing analyst for enterprise voice and data, said the communicator market continues to be fluid.

    He said growth was not yet following established patterns and market share positions were shifting one period to the next as PBX vendors battle each other and Microsoft.

    "It’s an exciting market to watch, and one that should thrive in 2009, even as the overall enterprise telephony market declines due to the economic environment," he said.

    "Similarly, the IPCC market will slow down in 2009, but should do relatively well as customers find IP contact centers, self service, and automation cost effective ways to deliver on customer service."

    Other report highlights:

    • In 1H08, over a million IPCC seats were sold worldwide
    • Avaya still leads the IPCC market by far in 1H08, but lost share to Cisco and Alcatel-Lucent
    • Nortel takes the lead in unified messaging license market share in 1H08, while Avaya maintains its lead in revenue market share; Cisco is now a close 3rd for both

  • Western Digital Makes Cut-backs As Demand Weakens


    Western Digital is to cut 2,500 jobs, or about 5 per cent of its global work force, and will reduce executive pay as a result of the global economic situation.

    Citing weakening demand for its products, the hard drive maker the company now expects fiscal second-quarter sales of USD $1.7 billion to $1.8 billion, with a "consequent reduction in operating results."

    Western Digital said demand for the current quarter is "significantly below" what it expected when it issued revenue guidance in October.

    Previously it sales outlook was USD $2.03 billion to $2.15 billion.

    The company plans to reduce compensation by an unspecified amount for its executive officers, board of directors and senior management.

    Manufacturing operations will cease from December 20 through January 1 and manufacturing hours will be reduced by 20 per cent through employee attrition and reduction in the use of temporary workers and overtime shifts.

    It is also closing one of its three hard drive factories in Thailand and will close or sell one of two facilities in Malaysia.

    The measures, expected to be completed by the end of March, are expected to save about USD $150 million a year. Western Digital expects to take related charges of USD $150 million in the fiscal second and third quarters.

  • Growth Strong In HD Videoconferencing and Telepresence


    A third of videoconferencing managers report that the economic crisis is likely to lead to an accelerated deployment of equipment rather than a slowdown.

    A survey from Wainhouse Research reports that customers are continuing to invest in "visual collaboration solutions", even in the current economic climate.

    It says the two largest drivers for this are travel reduction and improved decision making.

    Nearly a quarter of respondents have either deployed telepresence suites or are planning on deploying within one year.

    It’s not just full-room telepresence systems that are experiencing growth but videoconferencing solutions generally, including desktop videoconferencing applications.

    Wainhouse’s annual survey of videoconferencing end users indicates that in the past year, both interest in and purchases of more advanced visual solutions have increased dramatically.

    The results shows that 32 per cent of respondents have systems that can now support 720p HD videoconferencing.

    To support these and other unified communications applications, customers are continuing their migration to IP, with users reporting that 76 per cent of video calls now take place on an IP network – up from 66 per cent one year earlier.

    In addition, interest in integrating videoconferencing to unified communications platforms has grown significantly, according to the report.