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Tape Drive and Media Revenues Decreased by 25% in 2009

June 17, 2010 Posted by: Corey Recvlohe market analysis No Comments

2009 was without question a tough year for the global economy, with revenues across the board taking broad hits. Relative to our sector, we have seen a few players in the Backup market withstand substantial markdowns in growth, namely the Tape industry.

Today we would like to make you aware of research we found from the Santa Clara Consulting Group, a firm with more than 25 years of experience in the removable data storage industry. In their report, SCCG found that the Backup tape drive and media sales market for 2009 fell to $1.58 billion, down from $2.10 billion in 2008 – that’s a 25% move downwards. It’s obvious the market is looking for other vendors and technologies to provide data redundancy. We see this as a clear opportunity. You be the judge:

[Source - StorageNewsletter.com] Tape Drive and Media Revenues Decreased by 25% in 2009

According to the Santa Clara Consulting Group
Backup tape drive and media sales represented a $1.58 billion market in 2009. Drives accounted for $629.28 million and media for $955.53 million, according to Back-up Tape Technology Report – 2010 ($6,850) from by Santa Clara Consulting Group. The market for storage hardware was down in the year but had support from LTO 4 drives. Media unit sales were off and revenues were also affected by competitive conditions in the industry.

LTO was the major segment in the backup technology market in 2009. The drives, produced by HP, IBM, Quantum and Tandberg, represented sales of $534.31 million, 83.32% of backup drive revenue. HP led the market for LTO drives with a unit share of 51.11%. While third party suppliers were prominent in the market for LTO media, drive manufacturers HP and IBM supplying complementary private label products were among the major players. HP led the 24.43 million unit LTO media market with a 31.24% unit share. Fuji was second at 12.70%.

Quantum is the sole source of DLT-S drives. HP’s leading share of the 1.36 MM unit DLT-S media segment was 31.98%. The market for DLT-V media comprised of DLTtape IV and DLTtape VS1 cartridges had sales of $22.72 million. Quantum, HP, Sony, Maxell Imation and Fuji were the leading suppliers of these products.

DAT-72 was the largest DDS/DAT drive format in 2009 but posted a sharp decline in volume. DAT-160 gained traction during the year and supported media revenues. DDS/DAT drive sales amounted to $69.70 million representing 4.40% of the total backup technology market. Sales of DAT media came to $44.55 MM. The leading supplier was HP with 54.74% of the 5.702 million units sold. Sony, Imation and Maxell also maintained significant shares in the segment. DLT-V drive and media unit sales were both off. The drives had sales of $3.95 million in 2009.

The 8 mm technologies accounted for 3.90% of the total back-up technology market. AIT drive volumes were down sharply in 2009. Sales of AIT media contracted. They will continue to be available to support the drives which are now EOL. Tandberg’s 8 mm offerings are its VXA drives. Their sales were also down again in 2009. Total 8 mm media sales which are highly concentrated in AIT and AME products amounted to $41.17 million. Tandberg held a significant position in the media segment supplying cartridges compatible with its drives. Sony accounted for the vast majority of the sales of AIT media. It was the leading supplier in the total 8 mm media segment with a 72.05% share of the 1.088 million units sold.

QIC products represented 1.38% of total back-up technology revenue with sales of $21.90 million. Drives accounted for 18.40% and media 81.60%. The QIC market declined again in 2009. Tandberg was the sole supplier of 5 1/4” form-factor drives. Imation dominates the QIC cartridge media business. HP and Quantum were among the other vendors supplying this media.

Forecast
LTO drives have the most favorable outlook for hardware products over the forecast period. Their sales are expected to grow at a CAGR of 2.47% from 2009 to 2014. LTO cartridges have the most favorable outlook among media products with a CAGR of -2.21% leading to sales of $683.62 million in 2014.

– Storage Newsletter Comments –

Looking at the figures of Santa Clara Consulting Group last year, total tape drives and media represented $2.10 billion in 2008, which means a significant 25% decrease in 2009, with drives down 32% and media 19%. For the same period, LTO drive revenues declined by 28%. Consequently, it’s surprising to see the analyst firm predicting a CAGR growth of 2.47% from 2009 to 2014 for these LTO devices.

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