Storage software sales growth slowest in two years

Storage software sales growth is slower than at anytime in the past two years, according to data released by research firm IDC.

Worldwide revenue for storage software during the first quarter increased 3.3 per cent year-over-year to $US3.5 billion. While that was higher than the first quarter of 2011, revenues grew at a slower rate.

While there is still "healthy demand" for storage software products, the rate of growth within the market has slowed to levels not seen since 2009.

Companies with more than 1000 employees made up the biggest component of storage software sales with $US1.6 billion in investments during the quarter. Sales growth was flat, however, at 0.4 per cent year over year.

Storage software investments within the government and education category were also relatively flat, experiencing only 1.2% year-over-year revenue growth. Small and medium sized companies - those with fewer than 500 employees - drove a considerable amount of market growth during the quarter, increasing 8.8% compared to the first quarter of 2011.

"The first quarter saw decidedly mixed results," said Eric Sheppard, IDC's research director for storage software, in a statement. "Incremental spending attributable to recent product refreshes have run their course within some functional markets, such as storage infrastructure software."

Sheppard said continued fine-tuning of product pricing, packaging and messaging is helping to draw out new investments within other markets, such as the data protection and data recovery market.

EMC, IBM, and Symantec were once again the top ranking storage software suppliers with 24 per cent, 15.7 per cent, and 14.8 per cent market shares, respectively. CommVault, with 26.2 per cent year-over-year increases, and IBM, with 18.4 per cent, experienced the largest organic growth during the quarter. HP's recent acquisition of Autonomy helped drive 72.6 per cent year-over-year growth for the company during the quarter.

Meanwhile, sales of data protection/recovery and archiving software were the two fastest-growing sub-markets, with year-over-year growth rates of 5.5 per cent and 5.0 per cent respectively, according to IDC. Data protection/recovery and archiving software saw $US1.25 billion and $US411 million in total revenues, respectively.

IDC is owned by IDG, the parent company of Computerworld.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian or subscribe to Lucas's RSS feed. His e-mail address is lmearian@computerworld.com.

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