Storage Plays Backup To Other Priorities - InformationWeek

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3/11/2004
06:52 PM
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Storage Plays Backup To Other Priorities

It promises to be a growth year for storage vendors, but investment isn't as high as in some other technology categories. Business-technology executives might have more money in their 2004 budgets, but they learned a valuable lesson from the recent recession, and that is to use their money wisely. Few will pay $4 million for a storage system they'll grow into. Most will insist on storage on demand, only buying as they use it.

More than half of the 850 U.S. companies in NOP World's Technology Confidence Barometer survey expect an increase in storage investment this year. Another third report that spending will remain unchanged compared with 2003. Only 5% of sites anticipate cutbacks. Such numbers confirm an increase in budgets for many, but nobody will throw money at storage hardware to fix all capacity challenges.

Cash InfusionLooking at companies' spending intentions over the last year, keeping a hold on spending was the winning strategy between 2003 and 2004. The "staying the same" investment crowd jumped 8% compared with a year ago. Fifty-six percent of sites report more money has been delegated to growing storage operations in 2004, a 2% decline compared with a year ago. This shows that storage investment continues to hold its own, which is further supported by storage vendors that report improving financials for 2003.

As important as storage is, it will always play backup to the data and to other business issues facing people up and down companies. When identifying which technology products would show the most investment growth in 2004, storage is--well--just not a top priority. The growth forecast for storage is estimated at 5.3%, putting it fifth out of six technology categories studied.

What storage components are slated for upgrades at your company in 2004? Let us know at the address below.

Martin J. Garvey
Senior Editor
[email protected]


Fewer Cutbacks
Fewer Cutbacks

How does spending on storage tools and software compare with prior years?

Companies are generally unwilling to scale back storage operations this year. A year ago, 12% of sites expected cutbacks in storage spending, NOP World says. Only 5% plan reductions in 2004. This isn't surprising because of the demands of regulatory compliance. Tools such as storage-management software as well as systems for data backup and recovery are necessary components for complying with many government regulations.


Anticipated Growth
Anticipated Growth

What's the predicted growth for storage investment at your company?

2003 was a good year for storage vendors. Many reported upbeat year-end results, including EMC, Storage Technology, and Veritas. In 2003, the U.S. storage market rose 6.6%, up from 5.7% the year before, according to NOP World. The research house expects growth to continue, although not at the same rate as in previous years. This can be attributed to companies capitalizing on additional storage-management software rather than rolling out entire deployments.


Investment Focus
Investment Focus

What technology products are slated for the most investment growth in 2004?

New virus threats seem to appear almost weekly. Both consumers and executives are looking to vendors to create better cybersecurity, with more content and seamless operations among the most common requirements. And spam continues to test the patience of network administrators and workers. Little wonder that security software, Web-based applications, broadband, and spam-filtering software are all considered investment growth areas in 2004--ahead of storage.


Global Perspective
Global Perspective

What are the strongest growth areas for technology investment in 2004?

Products and services earmarked for the highest investment increases in Europe this year mirror those of the United States, with security software, Web-based applications, broadband, and spam-filtering software scoring highest. U.S. companies plan to spend slightly more on storage tools and services than their European counterparts. NOP Worldwide puts storage investment growth for the 50 states at 5.3%; for Europe, it's pegged at 4.7%.

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