Despite economic pressures that have led to spending constraints, revenues generated from disk storage systems in Asia Pacific increased by about 5 percent in the first half of this year, due to a strong demand for disk storage capacity. The disk storage systems market was valued at $1.24bn in the first six months of 2001, compared with $1.18bn in the corresponding period last year, noted research company International Data Corp (IDC) Asia Pacific. Total capacity in the six months ending in June this year was 14,325 terabytes, up 94 percent from the same period last year. Disk storage systems are where an organisation's primary data is stored, and typically consist of six to 100-plus disk drives, attached either externally or internally to a server via a controller, explained IDC Asia Pacific director of storage research Graham Penn. "Although disk storage systems internal to the server have experienced growth at a higher rate than the increase in the number of servers, it is the external disk storage systems that are experiencing the largest increase in demand," Penn observed in a statement today. He added that external storage systems are key building blocks for storage area networks and network attached storage, and are also being used for "rack-mount installations." The research firm noted that generally, the weak economic climate had prompted users to buy low cost direct attached storage or network attached storage solutions to meet their increased storage capacity requirements. Without revealing specifics, Penn said in an email interview that strong revenue growth was recorded in eight out of the 12 country markets in Asia Pacific, excluding Japan, in the first half of this year, with China registering the strongest growth figures. Singapore, Korea and Indonesia, he added, were the exceptions. However, the Australia-based analyst pointed out that the higher year-on-year revenue growth for disk storage systems in the first 6 months of 2001 was impacted by the dramatic 30 to 40 percent fall in the price of storage capacity per gigabyte. "This was mostly caused by technology change, that is, larger capacity hard disk drives in the arrays at nearly unchanged prices, but also by a changing mix of direct attached storage and network attached storage, and by competitive actions by some/most vendors as they competed for market share," explained Penn. In terms of revenues, Penn said EMC led the way among external storage vendors, followed by Sun Microsystems, Compaq Computer, IBM and Hewlett-Packard respectively. However, he declined to provide actual revenue figures. Without revealing specifics, he also said that Compaq was the market leader for external storage by terabytes, followed by EMC, Hewlett-Packard, IBM and Sun Microsystems. When asked which vendors are expected to be the top five in the second half of 2001 in terms of revenues and terabytes, Penn said that he expects EMC, Sun Microsystems, Compaq Computer, IBM and Hewlett-Packard to fill the top five positions, but would not rank them. He observed that other players including Dell Computer and Network Appliance are also prominent, with additional competition coming from companies like Auspex, Dot Hill and Quantum SNAP. Penn declined to provide a full-year forecast for disk storage systems revenues in the region, but projected that the region would chalk up second half sales of about $1.26bn over $1.32bn in the similar period last year. He cited "the lagged impact of the economic slowdown in many Asia Pacific markets" as part of the reason for the projected drop in revenues for the second half of 2001. "This is still being offset by a strong demand for storage capacity and also partially by an expected demand for additional capacity for data replication/business continuity purposes following the September 11 events in the US," he observed. In addition, Penn expects full-year storage capacity in Asia Pacific to be 27,000 terabytes, compared with 17,600 terabytes for the whole of 2000. See techTrader for the latest financial news in the high-tech sector. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the techTrader forum Let the editors know what you think in the Mailroom. And read other letters.