Storage management software totaled $5.6 billion in 2004, a 12.3 percent increase attributed to the increasing demand placed on corporations by federal compliance rules.
EMC led the storage management space, as usual, increasing its market share to 29.5 percent on sales of $1.66 billion. Veritas Software, in the midst of being acquired by Symantec, followed with 18.5 percent share on revenues of $1.04 billion. IBM retained the third spot on the leader board, with 12.2 percent on sales of $688 million.
But the greatest growth spurt was made by Network Appliance, which saw a year-over-year sales increase of 73.5 percent.
After earning $169 million in sales in 2003 Network Appliance sold $293 million in 2004, leapfrogging over Hewlett-Packard and Hitachi Data Systems (HDS) to capture the fifth spot behind No. 4 Computer Associates.
Symantec and CA suffered the greatest loss of share, at 9.7 percent and 9.5 percent, respectively.
Storage management software includes several sub-segments, including backup and recovery, archiving and replication. But Gartner said some of the greatest growth potential lies in storage resource management software (SRM), which manages the capacity and performance of data across disparate storage and server systems.
Though it was the second smallest segment in 2004, SRM grew 30.8 percent to reach $612 million in 2004. SRM is expected to continue to record fast growth as enterprises look to automate the management of storage capacity utilization through software, said Gartner analyst Carolyn DiCenzo.
"For some companies, the need to manage IT as a utility with service-level agreements between IT and the business units is also driving new requirements and increased interest in SRM," DiCenzo said in her report.
Overall, companies are purchasing more storage management software to accommodate government compliance regulations such as HIPAA, Sarbanes-Oxley and SEC 17a-4.
These regulations require corporations in industries such as financial services and healthcare to retain crucial data, such as client records, or transaction documents for specific lengths of time.
Because keeping records increases the amount of digital data that needs to be stored, vendors have been urging customers to implement information lifecycle management (ILM) strategies with their infrastructure software and hardware.
The bottom line is the data needs to be saved, duplicated and recalled on the fly. This is one of the reasons why storage management, and niches like SRM, have boomed and will continue to do so, Gartner said.
"The need to better incorporate electronic records into a total records management solution will offer real opportunity for storage vendors, but customers will need to look beyond the hype to determine exactly how a specific storage product will fit into their process," DiCenzo said.
Gartner expects the worldwide storage management software market to grow another 12 percent in 2005, reaching $6.3 billion.