According to an
annual report
released by analyst firm Freeman Reports, tape library revenue and
unit shipments took a tumble in 2006 following double-digit growth
rates in the two previous years.
Total revenue from all tape libraries was $1.81 billion in 2006,
a decline of 15.6% compared to 2005. The drop in industry revenue
follows two consecutive years of revenue growth -- 10.4% in 2005
and 13.5% in 2004. Total demand for tape libraries fell to 57,668
units in 2006, a decline of 4.5%. The report also says that revenue
will drop to $1.77 billion in 2007, but will rise to $2.15 billion
by 2012, a compound annual growth rate of 2.9%. Unit shipments are
projected to grow to 60,438 units in 2007 and to 80,707 units in
2012, for a growth rate of 5.8%.
The sharp decline in total units shipped last year was mostly
attributed to steep declines for 8 mm, helical scan, DLT and SDLT
formats. Of all the
tape library
formats, LTO showed a modest uptick in units shipped, from 48,900
units shipped in 2005 to 51,000 in 2006. However, the LTO format
declined in total revenue, from $1.116 billion in 2005 to $1.053
billion in 2006.
While the increase in unit shipments might seem like good news
for the LTO format, Freeman Reports' president, Robert Abraham,
noted in a press release that the 4% unit growth rate is the lowest
for the format since it was introduced in 2000.
How the vendors fared
IBM moved from second place in 2005 to leapfrog Sun Microsystems
Inc./StorageTek at the top of the market with a 29% market share in
2006 (in 2005, its share was 23.3%), a move the report attributes
to strength in half-inch cartridge and LTO libraries. Quantum and
its new acquisition Advanced Digital Information Corp. (ADIC)
combined for 26.7% revenue share, up from 21.7% share in 2005,
prior to their merger.
Sun/StorageTek, meanwhile, plummeted from 41% share and the
market lead position in 2005 to 26.2% share in 2006, which puts it
in third place overall. The report says Sun's library revenues were
down in every library category in 2006. Overland Storage Inc.,
meanwhile, slipped slightly (0.8%) but remained in fourth place
with 6.8% share. Hewlett-Packard Co. (HP) increased share from 1.7%
in 2005 to 5.3% in 2006.
Is disk-based backup winning the battle against tape?
"The cost per megabyte of magnetic disk storage continues to
fall, resulting in a perception that disk storage is closing the
price gap with tape storage," the report reads. Meanwhile, "some
disk subsystem manufacturers are blatantly targeting to eliminate
tape from the backup process because of tape's slow
performance."
Even when tape is not completely replaced by disk, the report
notes that tiered storage, which shifts tape into an archival
rather than a daily backup role, is also a factor in the decline of
tape library sales. Tape autoloaders and optical storage libraries
were also seen taking market share from tape libraries.
However, "recently announced removable disk products, such as
those from Imation, ProStor and Quantum, are expected to have
little impact on the tape library industry in the near term,"
according to the report.
Despite the numbers, the report does not conclude that tape is
not on its way out. "Most secondary and all tertiary storage
functions and utilities, such as disk backup, transporting of large
data databases and data archiving, are … best performed on tape,"
it reads. "Accordingly, tape subsystems usually accompany secondary
disk subsystems to provide an optimum solution."
Other analysts said they agreed with the conclusion that there's
a shifting role for tape, but also said it doesn't necessarily
foreshadow the death of the medium.
Heidi Biggar, analyst for the Enterprise Strategy Group (ESG),
said
recent ESG research (VTL Adoption and Market Trends)
shows that overall tape use is on the decline due to the increasing
presence of disk-based alternatives. In that research, she said,
21% of respondents described their data backup process as "backup
to disk," 51% described it as "backup to disk and then to tape" and
29% said they did "backup to tape only."
"If I were a vendor, I wouldn't put all my eggs in a tape
basket, though I wouldn't abandon it either," Biggar said. "Users,
if they haven't already, should start phasing in disk into their
tape-based environments. The benefits of doing so are many."
According to Greg Schulz, founder and analyst with the StorageIO
Group, in an email to SearchStorage.com,"the continued downward
pricing pressure and increases in tape capacity will [continue] to
make tape viable … in a shifting role from day-to-day backup … to
less frequent backup and long-term archive."