Reports Say Storage Business Recovering

The struggling disk-drive storage business broke out to post gains at the end of 2003, after suffering through a period of declining sales, according to two market-research firms.

In reports released Thursday, both the International Data Corp. (IDC) and the Gartner Group cited recent gains of 6.1 percent and 5.7 percent, respectively. Both reports hinted that the drought in IT spending may be coming to an end--or at least leveling off. The difference may be explained by the fact that the two firms look at the field from different vantage points.

"The recovery in the U.S. is real," said IDC's John McArthur, a vice president at the market research firm, in a statement. "There is a lot of optimism in the market right now." The IDC report covered hard-disk data-storage, stating that total sales of the devices hit the $5.62 billion mark in the fourth quarter.

McArthur said the IT recovery seems to be centered in the U.S.; there is little indication of improvement in overseas markets.

Gartner indicated that new regulatory requirements, including the Sarbanes-Oxley Act and the Health Insurance Portability and Accountability Act, should help spur the storage market in coming months. Many storage firms have programs aimed at helping customers comply with the new regulations.Both studies noted the rapid acceleration in the storage field by Dell Computer, which recently ramped up in the market. EMC supplies Dell with storage gear. Dell sold a total of $634 million storage products last year, Gartner said.