Storage Scratches Back

After a forgettable 2001, the market for storage services is poised for recovery, in part because of increased demand from outsourcers such as managed service providers (MSPs), a new report concludes.

“Many storage service providers are reporting strong growth in server and database backup services,” said Adam Couture, a senior analyst at Dataquest. “In
light of Sept. 11, enterprises are putting more emphasis on their business continuity strategies than ever before.”

Couture forecasts the overall storage services market at $26 billion this year, only $1 billion higher than last year. However, the number jumps to $41 billion by

While perhaps not as rosy as predictions were a few years ago, the market is considerable, enough so that Microsoft
is reportedly establishing a business unit to enter the field.

The Redmond, Wash., software giant isn’t saying much about the division or how it will compete with industry leader EMC
and other established players such as IBM and Sun Microsystems .

Analysts say hardware support constitutes the largest component of the market and will continue through the next three years as large companies delay new
equipment purchases until the economy improves.

Market forces will largely determine the growth of the industry, Couture said. But MSPs can impact their success.

“Many implementation, consulting and education and training opportunities will remain relatively flat, while storage management and hardware and software support
opportunities will have more potential,” Couture said.

Dataquest is a unit of Gartner . Shares of IT were off 0.06 to 11.06 at midday. In the last 52 weeks,
the issue has ranged from 5.8 to 12.7.

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