Tape Vendors Grab Disk
Revenues grow for disk backup while tape tapers off
February 4, 2005
![Network Computing logo Network Computing logo](https://eu-images.contentstack.com/v3/assets/bltde8121fc52c5c8f3/blt3f3d0318f746b1c2/65a530e4187606040a1d8b8c/placeholder.png?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
Disk backup is on the upswing at the expense of tape, according to evidence from tape vendors.
Overland Storage Inc. (Nasdaq: OVRL) today provided the most dramatic proof that the tide is turning toward disk (see Overland Reports Q2). Overland says revenue of its disk-based systems (named the REO line) doubled from last quarter to $2.8 million, and units sold grew 77 percent sequentially to 395, while tape revenue was flat sequentially and down 10 percent from last year, falling from $66.4 million to $59.7 million.
Storage Technology Corp. (StorageTek) (NYSE: STK) last week also reported its disk product revenue grew while tape revenue shrank sequentially and year over year (see StorageTek Serves Up Services). Advanced Digital Information Corp. (Nasdaq: ADIC) and Quantum Corp. (NYSE: DSS) didnt break out disk numbers in their most recent earnings reports, but both also heavily push disk-backup products.
Overland has been the boldest of the tape guys about openly embracing disk and the software that enables disk-based backup. In its earnings call with analysts today, CEO Christopher Calisi called disk-to-disk backup the top priority for IT departments. Calisi expects the move to disk backup to continue in the current quarter, and he forecasts disk revenue of $5 million.
The tape vendors walk a tightrope with disk, which remains a tiny part of their revenue. If disk becomes the backup medium of choice, customers may forsake tape vendors in favor of disk-only players such as EMC Corp. (NYSE: EMC) and Network Appliance Inc. (Nasdaq: NTAP), or virtual tape players such as Alacritus Software Inc., Diligent Technologies Corp., and Sepaton Inc.“We have an exciting growing [disk] business, yet we have a legacy [tape] business,” Calisi says. “Making sure we balance resources across these businesses is the problem.”
Calisi says he would like the current trend to continue because profit margins are better with disk, especially since Overland can roll out new software for the REO systems -- such as the remote-site data protection application it released last week (see Overland Offers Multi-SitePAC).
He also talks of possible OEM deals with his disk products. Overland has OEM deals for tape, but not for disk.
“This business is transitioning rapidly,” he says. “Today, our software and hardware sales include secondary and tertiary storage. They could one day include protected primary storage.”
For now, Calisi says, “We’re seeing customers desperate to move off tape in remote locations."As an example, he pointed to Continental Airlinesreplacing tape autoloaders with REO systems at sites around the world. He says Continental installed 15 REO systems last quarter and plans 11 more in Latin America this quarter. In Overland’s biggest deal last quarter, the American Medical Association purchased 13 REO systems for a total of 68 TBytes of disk.
Tape vendors still try to strike a balance between growing their disk sales while protecting their tape business. For instance, ADIC this week rolled out diagnostic tools for both disk and tape backup, while also doubling capacity for one of its enterprise tape libraries (see ADIC Tweaks Service Model, Library). Earlier in January, it upgraded its Pathlight XV disk-based system (see ADIC Ships New Pathlight VX).
The party line among tape vendors is that disk backups are faster, but tape will survive for archiving.
“Disk is a way of speeding up backups and giving you more fault tolerance,” ADIC marketing director Steve Whitner says. “But most backups are on tape, and from what we see, the vast majority want to continue them to be on tape.”
StorageTek considers disk a key piece of the Information Lifecycle Management (ILM) puzzle along with tape and management software (see Storability Promises Viability, StorageTek Taps Permabit's CAS Act, and StorageTek Flexes Disk). Quantum, the first major tape vendor to get into disk backup with its DX systems, says its disk backup is growing but it still spent $60 million to acquire rival tape vendor Certance last year to add LTO its DLT technology for tape libraries (see Quantum Buys Certance, LTO and Quantum Disk-Backup Sales Spike).— Dave Raffo, Senior Editor, Byte and Switch
You May Also Like
Maximizing cloud potential: Building and operating an effective Cloud Center of Excellence (CCoE)
September 10, 2024Radical Automation of ITSM
September 19, 2024Unleash the power of the browser to secure any device in minutes
September 24, 2024