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Last updated on April 20, 2014 at 8:28 EDT

A Storage Bubble: New Research From TheInfoPro Shows Excess Capacity and Limited Spending in Q4 of 2008

October 14, 2008

TheInfoPro (www.theinfopro.net) (TIP), an independent research network and leading supplier of market intelligence for the Information Technology (IT) industry, today announced that, according to its recently completed Wave 11 Storage Study — which provides continuous market data on technologies, industry opportunities, and trends in the Storage market — storage utilization rates at Fortune 1000 organizations are at low levels not seen since 2003. Additionally, a higher percentage of technology refresh purchasing during the midyear is offsetting typical year-end purchase activity. Both factors are resulting in a significant decrease in storage spending for Q4 of 2008.

A more in-depth analysis of these factors reveals that storage decision-makers purchased storage for 2008 using 2007/2006 growth rates. Unforeseen economic tension, slower business growth, and corresponding fewer new application deployments have left these organizations with excess capacity. In addition, uncertainty about budgeting developments in the beginning of the year led to an acceleration of technology refresh activity. Essentially, storage decisions-makers, anticipating future risk, accelerated infrastructure upgrades to ensure they could both retain budget levels and operate in a lower-budget environment in the future.

To view a rich media presentation of findings, visit: http://www.brainshark.com/theinfopro/stor_pr1

According to Robert Stevenson, TIP’s Managing Director of Storage Research, “Despite the current economic compression that many industries are seeing, in particular Finance, storage technology vendors have had better results in the first three quarters of the year than many analysts had expected. As we looked into this disparity, it became clear that Storage professionals were accelerating their spending as an end run around the possibility of budget allocations being frozen or taken away. This was accomplished through a 20% increase in technology refresh activity compared to the same time in previous years.”

“Once business confidence returns, the cost of building new applications will be lower, due to the available capacity that can be used without purchasing. However, if confidence does not return in the near future, the spending outlook for the next three quarters could be lower, given that, in a slower-growth business environment, there is enough excess capacity that no additional purchasing would be necessary,” adds Stevenson.

Together, 250 firms, including 140 Fortune 1000 Large Enterprises and over 100 Midsize Enterprises in both the U.S. and Europe, were interviewed for the Wave 11 Storage Study, providing commentary and insight on their Storage adoption plans, management strategies, spending, and vendor performance. Storage Technology providers that were mentioned throughout the study include: 3PAR, Adaptec, Attune Systems, Arkivio, Asempra, Attachmate, Autonomy, BakBone, Blue Coat, Broadcom, Brocade, CA, Ciena, Cisco, CommVault, COPAN, DataDirect Networks, Data Domain, Dell, Double-Take, Egenera, EMC, Emulex, FalconStor, Finisar, Force10 Networks, Fujitsu Siemens, HDS, HP, IBM, IBRIX, Incipient, InMage, Isilon Systems, Juniper, LSI, Microsoft, NetApp, NEC, Nexsan, Nortel, ONStor, Overland Storage, Oracle, QLogic, Quantum, Quest Software, Rackable Systems, Red Hat, Riverbed, Seagate, SEPATON, Signiant, Silver Peak, Spectra Logic, Sun, Symantec, Virtual Iron, Voltaire, Winchester Systems.

About TheInfoPro

TheInfoPro (TIP) is the only independent research network for the Information Technology (IT) industry. Through a peer network of over 1600 of the world’s largest buyers and users of IT, including Citigroup, FedEx, McGraw-Hill, MasterCard, Pfizer, Vodafone, PepsiCo, JPMorgan Chase, and Harvard University, TIP delivers detailed budget, vendor performance and technology roadmap data without spin or bias. Known as the “voice of the customer,” TIP helps IT professionals, technology providers, and institutional investors make sound decisions on technologies, vendor relationships and investments. Founded in 2002 by alumni of Gartner, Giga, EMC, and Bell Labs, TIP is headquartered in New York City, with offices in San Francisco, Chicago, and Boston. To learn more, visit www.theinfopro.net or call 1-212-672-0010.

 Contact: Bernadette Abel Phone: (646) 649-8539 Fax: (212) 688-6598 Email Contact

SOURCE: TheInfoPro