Storage vendors face tough market in 2002

A survey of Australian companies has found up to 80 per cent have no intention of purchasing storage products this year paving the way for tough market conditions for vendors in 2002.

The Australian scenario is typical of the entire Asia-Pacific region, according to Gartner Dataquest research which shows 75 per cent of companies in the region will not embark on any substantial storage acquisitions this year.

Analysts have attributed the tough conditions to a phenomenal increase in storage shipments over the past couple of years, a rate which has proven unsustainable.

Dataquest said adoption has been too high while effective utilisation rates are low.

The findings are from a study of 850 organisations in the Asia-Pacific region during September 2001.

Regional Gartner research director for servers and storage, Phil Sargeant, said there are a number of reasons why companies won't be embarking on any large storage purchases this year, including the economic downturn and storage under-utilisation.

"The levels of utilisation rates vary significantly from country to country across the region," Sargeant said. "India for example, has one of the highest utilisation rates at 62.5 per cent. Conversely, China has one of the lowest rates, at 50.4 per cent, due primarily to a lack of available tools to guide companies on how to use storage effectively."

Australia has the third highest utilisation rate of 61.9 per cent, behind India and New Zealand.

In comparison, Gartner's study found that server acquisition programs are still steady, with 34 per cent of all respondents indicating they would be embarking on significant server acquisitions this year.

Gartner's principal analyst for hardware platforms, Matthew Boon, said despite long-term indications that storage spending would overtake server spending, there appears to be more momentum in the server market today.

"This is clearly a positive message for the region's major server players, particularly as most respondents indicated they would acquire storage from the traditional server providers," he said.

The Gartner report found users still see multinationals as the vendors of choice in the server and storage arenas with the strongest preference for Compaq, HP and IBM.

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