Tape library sales and revenue dipped in 2006 after two years of ten percent plus growth, according to Freeman Reports' research.
Compared to 2005, tape library revenue dipped 15.6 percent to $1.81 billion, and units sold declined by 4.5 percent to 57,668. Tape library revenue growth was 13.5 percent in 2004 and 10.4 percent in 2005. The declines in 2006 were not spread evenly across all formats. While LTO showed a slight rise in units shipped of 4 percent, DLT, helical scan (AIT and others) and 8mm formats all had falls in shipped units. LTO did actually declined in revenue to $1.035 billion from $1.116 billion.
IBM was the number one supplier with a 29 percent market share, up from 23.3 percent in 2005. The number two supplier was Quantum, with help from its ADIC acquisition. It showed a 26.7 percent share.
Sun, last year's primary supplier (in the form of StorageTek) slumped to third rank with a 26.2 percent share in 2006, down from an impressive 41 percent in 2005. Clearly StorageTek tape automation sales have not been holding up. In fourth place was troubled Overland Storage with a 6.8 percent share, down 0.8 percent year-on-year, with HP in fifth place at 5.3 percent. This represents an impressive rise from its 2005 share of 1.7 percent.
The research writers suggest that data protection using disk has become less expensive and may be taking sales away from tape. It speculates though, that tiered storage means cheap serial ATA (SATA) drive arrays could be housing old but still accessed data that would have once gone to tape because there was no alternative. Now there is.
It doesn't mean that tape libraries are facing an era of decline. They are not; the tape market is forecast to rise, with demand for tape libraries rising from a low point of $1.77 billion in 2007 to $2.15 billion by 2012. This will be driven by unit shipments of 60,438 units in 2007 rising to 80,707 units in 2012.
That at least gives Sun some scope for recovering its lost tape library sales. If it does not then, if its own steep decline continues, it may meet growing HP on the way up.
Freeman Reports specialises in researching the tape market and has been issuing annual reports on it for several years.