Backup, storage sales surge as Y2K nears

Holiday gifts, party dresses, champagne and caviar aren't the only items on Hong Kong shopping lists as the new millennium approaches. Local firms are also busy purchasing backup and storage products to safeguard their data in the event of a Year 2000-related disaster.

According to vendors and distributors in Hong Kong, demand for backup and storage devices, and associated consumables, has been high since the third quarter.

"Sales of storage devices -- including tape drives, backup tapes, CD-recorders and writable CD-ROMs -- surged by 50 per cent in September," said Richard Chan, managing director of Universal Electronics, a local distributor of office IT supplies. "Even today, we're selling an average of 10,000 writable CD-ROMs every couple of days. Compared to last year, the demand has doubled," he said.

According to Chan, the main reason for the recent upsurge is that many companies are planning to make additional backups of their most crucial data this month, especially during the week before Christmas when business is slower.

"We've worked with the vendors to plan ahead of time for this year's huge consumption. If our stock had been what we would normally carry at this time of year, there's no way we could have met the demand," Chan said.

Karen Lee, market development manager in Hewlett-Packard (HP) Hong Kong's Server and Information Storage Division, said HP has also experienced a surge in demand, and expects her division's total sales volume this year to be double that of last year. However, she attributed the growth both to the Year 2000 problem and to the fact that there have been so many Internet startups entering the market in Hong Kong during the second half of this year.

Lee estimated that general sales of HP's storage products have risen by 30 per cent to 40 per cent since the beginning of the third quarter. Because larger companies typically began their backup effort early, the eleventh-hour rush was primarily driven by small- and medium-sized enterprises (SMEs), said Lee, adding that the hottest items for Hewlett Packard Hong Kong are tape drives and autoloaders. Lee predicted that the demand would slowly die down during the final weeks before the holidays.

Though Iomega Hong Kong's business flattened in the third quarter, corresponding with the drop in sales of non-branded PCs stemming from the Taiwan earthquake, Elvin Kam, Iomega's Hong Kong and China country manager, said sales have taken off in the fourth quarter. He cited Year 2000 concerns as well as Iomega's sales promotions, and estimated that this year's turnover will be approximately 25 per cent higher than last year's.

The same strong sales story is being told by Quantum, but the company expects the fourth quarter to be a non-event since most companies have already prepared for Year 2000.

"Sales revenue was up more than 30 per cent because of both strong drive (sales) and even better media sales," said C.T. Wong, Singapore-based business development specialist for Quantum Data Storage Solutions Group in Asia-Pacific.

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