History (1997): WW RAID Revenue to Reach $16 Billion in 1997

By the year 2000, intelligent storage arrays are expected to capture most of the projected $23.7 billion RAID revenue.

Calendar year 1997 RAID revenue is expected to reach $15.9 billion, a 22% increase over 1996. 1997 marks a turning point for a number of factors affecting storage. These include users’ expectations for higher data accessibility, the rise of new applications, newer product implementations and recent industry moves.

These factors are discussed in the 1997 Intelligent Storage Arrays Report (200 pages, $1,575), a new report that is jointly published by Peripheral Concepts and Peripheral Research.

“At a time where advances in network storage architecture and storage management are about to revolutionize the way corporations access data, continuing to do ‘business as usual’ is risky,” said Farid Neem, president, Peripheral Concepts.

Users are moving towards an internal organization that is increasingly centralized. Regardless of the market segment to which they belong, an enterprisewide solution is becoming a must. Almost all future server and mainframe storage will be based on RAID configuration.

The generalization of its use is foreseen by year 2000, fueling an 18% average compounded growth rate (ACGR) based on revenue, NT being the fastest growing platform.

By year 2000, it will be difficult to determine the share of RAID from disk drives, as RAID controllers are integrated in OSs or on motherboards. The new file systems will offer the users the ability to share all storage systems of a network, and provide RAID capability at the file level. This important move is predicated on the utilization of four major storage architectural techniques, utilizing a FC topology and fabric. They are NAS, SAN, clustering and data sharing.

The ease of use of NAS is unmatched, and it is foreseen that independent vendors favor this approach that is suited for low end and mid-range implementations.

It is anticipated that SAN will be the architecture of choice of system and server suppliers.

The shipment revenue for the total of NAS and SAN markets is forecast to reach $8 billion by year 2000.

Revenues related to clustering should experience similar growth.

Newer applications require the easy and rapid transfer of large amounts of data, emphasizing the need for I/O-centric implementations. Of particular interest, video and multimedia constitute a very large market potential for RAID storage systems.

According to Dennis Waid, president, Peripheral Research, “Video and multimedia will find applications in education, medical, entertainment, trove I and hotel industries among others, and the annual revenue will grow from $ 1 billion today to over $4 billion in 2000.“

It seems clear that the revenue in spite of a healthy growth cannot sustain the present 150+ vendors. Presently, 8 vendors earn 86% of the revenue. Many of these companies have experienced more than 3% revenue growth in 2Q97 over 2Q96. The next 10 companies capture another 8% of the total revenue, leaving 6% to some 130 companies.

This article is an abstract of news published on issue 117 on October 1997 from the former paper version of Computer Data Storage Newsletter.