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Storage software is all the rage in Q4

EMC still king

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The market for storage software surged in the fourth quarter with particularly strong growth for much-hyped storage resource management (SRM) products.

Overall, the worldwide storage software market posted 17.7 percent year-on-year revenue growth in Q4, according to IDC. Software makers pulled in a total of $1.78 billion in revenue. For the full year, vendors generated 8 percent more revenue in 2003 than in 2002.

In the fourth quarter, the trusty back-up and archive product segment grew 17.6 percent year-on-year. Replication products grew 14.7 percent and SRM products grew 16.2 percent.

But for the full year, the SRM product segment was king. It grew 11.3 percent followed by replication software at 9.5 percent.

"Storage software spending accelerated during the fourth quarter," said Bill North, research director for storage software research at IDC. "The storage resource management market benefited from the wider adoption of more integrated software to manage complex networked storage environments, while the backup and replication markets were propelled by a combination of increased storage hardware spending and the need to support disaster recovery and regulatory compliance initiatives."

EMC ended up as the big winner in the fourth quarter. It grew revenue 25.7 percent and increased its market share to 31.7 percent. EMC sold $563 million worth of storage software in the quarter, including revenue from newly acquired Legato.

Veritas also did well in the quarter, taking the number two spot in overall sales. Veritas pumped revenue totals 21 percent and captured 21.9 percent of the overall market.

Computer Associates, IBM and HP finished well behind the two leaders with $174 million, $148 million and $141 million in sales, respectively.

For the full year, the rankings were the same with EMC pulling in $1.93 billion in revenue, Veritas posting $1.339 billion in revenue and the other vendors generating less than $600 million each.

Full results are available here.

The vendors are likely pleased to see software sales improve at such a rate. EMC, in particular, has been very aggressive in its attempts to generate more revenue from high-margin software, as hardware margins have been hurt by tougher pricing. EMC acquired a number of software makers over the last year, including Legato, VMware and Documentum.

Hardware sales also increased in 2003, but by only 8.4 percent. ®

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