History 2003: In Tape Libraries, LTO Surpass DLT/SDLT for First Time in 2002

According to a study from Freeman Reports, Tape Library Outlook 2003 ($3,195), the market for tape libraries in 2002 achieved unit growth of 3% while revenue declined 8% in a languishing global economy.

Total demand for tape libraries rose to 65,400 units in 2002 and is projected to climb to 117,000 units in 2008, a CAGR of 10%. Revenue fell to $1.97 billion in 2002 but will recover in 2004 and rise steadily to $2.96 billion in 2008, a growth rate of 7%.

Total unit shipments and industry revenue will both see slight declines this year vs. 2002 primarily due to a continuing consolidation of the DLT/SDLT library segment which started in 2002. Weakened DLT/SDLT library sales in 2002 coupled with strong LTO library sales enabled LTO libraries to move into the market lead position for the first time.

“LTO libraries made gains in virtually every market segment, and showed the strongest unit and revenue growth rates in 2002, more than offsetting the combined declining shipments of other categories,” says Bob Abraham, author of the report. “The increasing adoption of SAN and NAS network storage solutions continues to be the dominant driving force in the growth of automated tape libraries.”

LTO library shipments up 95% in 2002
“The magnitude of the growth of LTO libraries in 2002 was impressive, especially in a sluggish economic environment,” he observes.

Library manufacturers quickly adopted these leading edge compact drives as demand for the libraries leaped from 13,200 units in 2001 to 25,700 units in 2002. Shipments will grow 10% in 2003 to 28,300 units and to 59,800 in 2008, a compound growth of 15%.

Factors underscoring this growth projection include an early market entry, multiple sources for the key library components, a well defined technology migration path, a wide range of library offerings, and competitive pricing.

DLT/SDLT library shipments declined 30% in 2002 to 25,300 units, surrendering the top volume position in the tape library market to LTO. DLT/SDLT libraries commanded nearly 39% of 2002 unit shipments, down 18% from the previous year. This percentage age will erode to 30% by 2008 due primarily to the continued intrusion of LTO libraries.

LTO libraries comprised 39% of unit shipments in 2002 and will achieve a 51% share of units in 2008. 8mm libraries accounted for 18% of the 2002 units and will account for 16% of shipments in 2008. Libraries incorporating half-inch cartridge drives, Magstar MP drives, and high performance helical scan drives account for the remaining 4% of unit shipments in 2002. These combined units will comprise 3% of the 2008 total. The market for SLR data cartridge libraries has not developed and comprises a negligible part of the tape library market.

Revenue rankings quite different
The much higher prices commanded by half-inch cartridge tape libraries segment, in order of rank, were HP, Seagate RSS, Sony and MKE/Panasonic. In the 8mm helical scan segment, Sony increased its share over EB by more than 20% as its AIT drives exhibited strong Y/Y growth. Although StorageTek’s shipments of its 9840 drives saw a decline in 2002 from 2001, its combined shipments of 9840 and 9940 drives increased in share vs. IBM and Japanese manufacturers, NEC and Fujitsu, in the high-end half-inch cartridge, 3480-90/3590/9840/9940 segment. IBM’s Magstar 3590 drives were more vulnerable to cannibalization from its LTO products in the mid-range market, and while StorageTek increased its unit share of this segment by 6%, IBM’s share decreased by just over 4%. On a factory revenue basis, StorageTek grew its share of this segment by about 11% while IBM’s revenue share dropped by 7%.

This article is an abstract of news published on issue 185 on June 2003 from the former paper version of Computer Data Storage Newsletter.