Finally, Some Good News

If you're like me, you've probably gotten steadily more depressed in recent months by the never-ending stream of bad economic news. Whether it's the sub-prime mortgage mess or the frozen credit markets or declining home prices or the problems on Wall Street and in Detroit or the constant reports of more layoffs or your quickly evaporating 401(k), there hasn't been much to be cheerful about as we enter the holiday season.

That's why I was happy to receive two releases from IDC that indicate the storage industry is doing much better than most industries. The research firm said factory revenues for worldwide external disk storage systems increased 8.8 percent year-over-year to hit $4.9 billion in the third quarter, and, even better, the storage software market had revenues of $3.1 billion in the third quarter, an increase of 11.6 percent from the same quarter a year ago. It was the 20th consecutive quarter of year-over-year growth for storage software, the firm said.

Happy holidays!

Of course, it isn't all blue skies and clear sailing. There are storm clouds and rough waters ahead. All the economists and politicians tell us that things are probably going to get worse before they get better. And I don't expect my 401(k) to rebound to previous levels for many years.

Still, it is nice to be part of an industry that is still growing and increasing sales and providing a useful and necessary service. It sure beats being part of the auto industry or the real estate business or Wall Street. Would you rather be selling storage products and software and services or cars and annuities and condos? That's an easy question to answer.And we all know why we're seeing this growth. No matter how bad the economy gets, there won't be any decline in the amount of data that businesses and other organizations create. So the need for more storage is becoming one of those basic fundamentals, like the need for oxygen -- necessary to survive.

There were a couple of interesting tidbits in the reports that are worth mentioning. EMC Corp. (NYSE: EMC) remained the market leader most categories, increasing its market share in the third quarter in external disk arrays and storage software.

And the top of the charts continued to be owned by the big boys -- Hewlett-Packard Co. (NYSE: HPQ), EMC, IBM Corp. (NYSE: IBM), Dell Inc. (Nasdaq: DELL), Hitachi Ltd. (NYSE: HIT; Paris: PHA), and NetApp Inc. (Nasdaq: NTAP) in disks and EMC, Symantec Corp. (Nasdaq: SYMC), IBM, NetApp, HP, and CA Inc. (Nasdaq: CA) in software. Together, the major vendors dominate the market, with the "other" category accounting for only 13 percent of the storage software market and for less than 10 percent of the total disk storage systems market.

One way they continue to rule the market is through their relentless drive to cut prices to gain share. That becomes clear when you compare hardware revenue growth to the growth in hardware capacity shipped. Worldwide revenue for total disk storage systems grew by 1.1 percent to $6.6 billion in the third quarter, while capacity shipped grew 41.7 percent to 2,170 petabytes in the same quarter. That disparity can only happen when competition is intense and prices are dropping rapidly.

So IT administrators and storage managers have a number of things to be happy about as we enter the holiday season. Yes, you will have to buy more storage to store more data, but you are going to be able to get more for less. And there are a number of interesting new technologies poised for take off -- for example, storage virtualization, cloud storage, and solid-state technology -- that could dramatically transform storage management and data center infrastructure.So we really have a lot to be happy about as we enter the stretch toward the new year.