Spending More on Storage

Recession? What recession? There is no recession when it comes to spending on storage at large companies. In a survey last month of 400 IT managers at companies with 1,000 or more employees, 62 percent said they expected to spend more on storage hardware, software, and services this year than they did last year. They also predicted that their storage volumes will continue to grow by around 40 percent a year.

Those surveyed predicted that their storage budgets will increase between 15 percent and 20 percent this year, and 20 percent to 24 percent over the next two years.

The survey was sponsored by Symantec, which is using the slogan "Stop buying storage" to promote its storage management and optimization software as a way to reclaim unused storage capacity and reduce or eliminate (for a while) the need to buy more disks. But that message isn't taking hold, if the survey results are to be believed. The survey was conducted by Applied Research in March.

About one third (37 percent) of the survey respondents said they were a vice president or a senior vice president in the IT department, while another 30 percent described themselves as director-level and 28 percent said they were managers. Only 6 percent said they were IT staff, which may help to explain some of the puzzling answers the survey produced. The industries represented by the largest number of respondents were manufacturing, with 23 percent; technology, with 13 percent; retail, with 12 percent; and financial services and banking with 8 percent.

Some 48 percent said they had a "good" current understanding of their storage utilization, and another 36 percent said their understanding was "excellent." Yet, the figures they gave for utilization rates for primary storage don't match up with most industry research. More than one in five (21 percent) said their primary storage utilization rate was between 80 percent and 89 percent, and another 19 percent said it was between 70 percent and 79 percent. And 18 percent said it was between 60 percent and 69 percent. Only 22 percent said their primary storage utilization rate was under 50 percent.Most industry research indicates that a typical enterprise storage utilization rate is below 40 percent, and often much lower. Symantec says an average of the survey results showed a utilization rate of between 30 percent and 40 percent. It may be that the veeps and directors don't really have as clear an understanding of storage utilization as they think they do. I'd love to compare their answers with those from the staffers.

Those numbers should be more accurate if companies are using storage resources management tools, as 42 percent of survey respondents said they were.

For those outside of the storage industry, the amount of money spent on the technology can be stunning. Some 14 percent said they spent more than $50 million on storage last year; 21 percent spent between $25 million and $50 million; and 31 percent spent between $1 million and $25 million. That's a lot of disks. And it helps to explain why this industry is so competitive. Winning just one of those big-spending customers can make the difference between a good year and a bad year for many vendors.

Symantec seems to be conducting these surveys on a regular basis to help push the idea that companies can reduce the need to buy more storage if they just used software more wisely. However, the survey answers indicate that many companies are doing just that -- implementing or testing things like email and file archiving, data de-duplication, thin provisioning, and other tactics. Those companies that have deployed such applications have been able to free up storage capacity and keep more data available online, the survey indicates.

Still, the amount of money companies spend on storage is huge and growing. It may help to explain why venture capitalists are still funding storage companies, and why there seem to be a lot of deals among tech vendors that are jockeying for position in the market to provide high-end systems for large enterprise data centers. While there may be some decline in spending on storage among some market segments, these survey results indicate that the recession hasn't hurt storage spending in the same way it has hurt other parts of the economy.InformationWeek Analytics has published an independent analysis of the challenges around enterprise storage. Download the report here (registration required).