History (1993): DAT Continues Dynamic Growth

“Worldwide market demand for computer tape drives utilizing helical scan technology will approach $1.25 billion at OEM price levels in 1998, a 17% annual growth rate from the $490 million value of the 1992 market,” declares Robert C. Abraham and Raymond C. Freeman, Jr., authors of the newly released Helical Scan Products ($1,950) published by Freeman Associates, Inc. (Santa Barbara, CA).

Unit shipments of all types of helical scan tape drives will grow from 457,000 units in 1992 to nearly 1.5 million units in 1998 – a 22% compound rate – according to their predictions.

“In 1992, the market for helical scan tape drives grew at a 52% rate in units and a 32% rate in revenue, a strong showing in a soft market,” asserted Freeman.

The markets for 4 types of helical scan tape drives are analyzed and forecast in the report: DAT, 8mm, VHS, and 19mm.

Increased shipments of high capacity HDDs and the increased use of color graphics are fueling demand for high-capacity, small-form-factor tape drives such as DAT and 8mm products, according to Abraham.

“The need for very high capacity tape products for unattended backup or high volume archiving is growing rapidly. Helical scan products can provide viable, cost-effective solutions,” he pointed out. “VHS and 19mm devices are finding significant growth in specialized applications needing massive storage and high performance.”

DAT coalition hits target with lower prices and higher performance
The timely introduction of DDS-2 drives by a number of suppliers – and rapidly declining prices – have propelled DAT to a solid position in the highly competitive small tape market. DAT drives currently provide 2GB (DDS) or 4GB (DDS-2) of uncompressed storage capacity. These devices have wide appeal due to their compact, low-cost media and their potential to ultimately provide up to 16GB in a 3.5-inch package.

Shipments of DAT tape drives approached 300,000 units in 1992 – up 84% over 1991 shipments of 160,000 drives. Unit shipments are projected to grow to 1.25 million in 1998, a 27% annual growth rate from 1992 levels.

Declining prices will limit compound revenue growth to 19% over this period, from $243 million in 1992 to $688 million in 1988. Revenue from 2GB models will peak in 1993 at $316 million and cease in 1997. Revenue from 4GB models, introduced in 1993, will surpass that of 2GB models in 1995.

8mm plans to jump from 5GB to 2GB
8mm drives provide up to 5GB of capacity in a 5.25-inch package, and products have been announced to provide more than 20GB by late 1994. As this product evolution continues, 8mm drives are expected to continue their steady market penetration, broadening their OEM base.

“This class of drive will remain a popular choice in networked desktop systems and in workstations which utilize high capacity HDD drives,” according to Freeman. “Automated media libraries and changers will further enhance their appeal.”

In stark contrast to the team effort underpinning the successful efforts of DDS and QIC, Exabyte Corp. has succeeded in the 8mm market by going it alone. With the assistance of a Japanese manufacturing partner, the company has created a market that is expected to grow to an installed base of over 1 million units by 1997. Shipments of 8mm devices will rise from 162,000 units in 1992 to 223,000 in 1998, a 5% annual growth rate. Revenue growth for 8mm drives will be at an annual rate of 2%, rising from $226 million in 1992 to $256 million in 1998.

High end products find growth in niches
VHS drives, available in desktop or rack-mount configurations, currently provide 18GB on one VHS cassette. Shipments of these drives will grow from 200 units in 1992 to 1,500 in 1998, a respectable 39% annual growth rate. Revenue growth will be at an annual rate of 27%, increasing from $4 million in 1992 to $16 million in 1998. These devices are available from only one supplier, Metrum. Despite attractive growth rates, the small size of this market is unlikely to attract additional participants.

19mm devices store from 12GB to 165GB per cartridge, depending on recording format and cartridge size. Shipments of these products, which include both DD-1 and DD-2 varieties, are forecast to grow from 100 units in 1992 to 4,100 units in 1998, an annual growth rate of 82%. Revenue for these products will grow at a 60% rate over the forecast period, from $17 million to $287 million. Derived from broadcast recording technology, 19mm products offer the high capacity and transfer rate needed for many specialized applications, including data collection and hierarchical storage.

Twenty-two companies are identified in the report that have announced helical scan products or are believed to be developing such devices.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 70, published on November 1993.