SAN gaining foothold in AP, IDC says

Storage area networks now account for over 60 percent of installations in the region's external disk storage market, analyst company reports.

Storage area network (SAN) is gaining foothold in the Asia-Pacific external disk storage market, according to IDC.

The analyst company last week released its Asia-Pacific Quarterly Disk Storage Systems Tracker which found that SAN shipments in the region has increased, while the shipments of the direct attached storage (DAS) has decreased.

SANs now account for the lion's share of the external disk storage market in the Asia-Pacific region, excluding Japan, at more than 60 percent of all configurations, IDC said in a statement. This is because of the mix of installation types that has changed in favor of SAN over the last few quarters, IDC added.

The research house expects the adoption of SAN to continue growing in the coming quarters as customers become exposed to the increasing choices of installations scheduled for launch, such as "simple and affordable SAN-enabled storage systems" that are targeted at small and midsize businesses (SMBs).

"More vendors are now identifying new opportunities available in the SMB market segment," noted Jack Yu, IDC's Asia-Pacific senior market analyst for storage research. "While most vendors have been providing affordable midrange disk storage systems to tap this potential customer base, a number have introduced simple, affordable and easy-to-install SAN-enabled storage starter kits that incorporate backup software."

Yu explained that this approach has not only helped vendors expand their customer base, but has also made it easier for customers at the entry-level to "adopt SAN solutions as their preferred storage environment".

He noted that "all these [developments] have led to the increasing awareness and adoption of SAN in the region".

According to the IDC study, the external disk storage market in the APEJ region contracted slightly in the third quarter of 2006 by 2.6 percent, compared to the previous quarter. However, this market grew by 9.5 percent to reach US$507.7 million over the same period last year.

The capacity of external storage shipped in the third quarter fell by 4.6 percent, from the previous quarter, to 59,427TB although the gigabyte unit pricing remained relatively stable at US$8.54 per gigabyte.

Yu noted that the region's external storage market "experienced a marginal decrease in the third quarter of 2006 in sequential terms", when compared to the strong surge in revenue in the second quarter this year--which in turn was fueled by the fulfillment of delayed orders from the previous quarter.

He predicted that the region is expected to "witness good growth in [the fourth quarter of 2006] as some of the major vendors close their respective fiscal years".

Furthermore, IDC's findings indicate that China> is set to dominate the Asia-Pacific region again in terms of storage demand.

External disk storage revenue in the country, at US$168.6 million, made up 33.2 percent of the region's total market in the third quarter of 2006. Australia was in second place at 15.4 percent, while Korea trailed closely in third place at 15.1 percent.

In terms of vendor share, IBM led the market in the third quarter of 2006 at 22.4 percent, and expanded its revenue by 51.4 percent over the same period last year.

EMC followed closely in second place at 21.2 percent, with revenue growing by 4 percent over the same period last year. Hewlett-Packard came in third at 20 percent market share, where its revenue fell by 16.7 percent year-on-year.