History (1994): 1993 IDC Storage Marlet Outlook on IBM AS/400 DASD, Generating $1.9 Billion

The IBM AS/400 DASD market was flat in 1993, and we believe it will remain so into the foreseeable future.

Despite the sluggish end market growth, several opportunities remain for DASD suppliers. Notable are 9406 after markets for high-performance scalable cache subsystems and protected RAID products. We expect a 9404/9402 after market to develop slowly, requiring capabilities similar to the 9406 base. Companies executing on these and to other, emerging opportunities will continue to gain share.

The AS/400 systems market continues to dominate the mid-range multi-user systems segment as a competitive distributed platform. As we enter 1994, the AS/400 installed base exceeds 250,000 and the AS/400 DASD business generates about $1.9 billion worldwide.

This figure is projected to be flat through 1997. Although unit shipments continue to trend upwards, price per megabyte declines of nearly 30% are putting pressure on revenues.

As a result, revenue growth in AS/400 markets can be accomplished only though market share gains. The best opportunities are in the AS/400 aftermath.

Our estimates indicate that the AS/400 DASD after market grew almost 19% in revenue terms in 1993. We expect this segment to keep on its growth pattern for the next years. Overall, the AS/400 DASD business remains strong, but with slow growth. IDC expects the 9406 aftermarket to continue to provide the largest opportunities, and 9402/4 after markets will continue to emerge as vable segments. We expect continued product innovation from IBM and PCMs, fierce competition, and possibly new entrants in 1994.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 76, published on May 1994.