ONG KONG, 29 OCTOBER 2009 - The demand for storage in the Chinese mid-market sector will grow a CAGR of 11.5 per cent from an estimated US$513 million in 2009 to US$838 million by end-2013, said Springboard Research Thursday.
Storage hardware contributes 80 percent of the total mid-market storage market, while software is growing fast and will gain share in the next five years, said Springboard.
According to the analyst firm, the mid-market consists of enterprises with annual revenues of US$7-44 million (RMB 50-300 billion) and employees numbering between 300-2,000; and public sector organizations with employee size of 100-500 and annual IT budgets of US$0.3-1.5 million (RMB 2-10 million).
"In contrast to the incredibly rapid growth during the last few years, the growth rate of China's storage mid-market is forecasted to slightly drop over the next two-three years, but it will still be the fastest growing segment in the total storage market," said Gene Cao, market analyst at Springboard Research. "The unique dynamics of the market will generate a further push for automated, unified solutions that are cost-effective and provide adequate returns in the short term."
Virtualization and cloud storage become hot trends
Springboard's said that virtualization usage in the mid-market sector could see a surge on the back of demonstrated cost savings, along with strong push by the leading vendors.
Cost benefits will also drive demand for cloud storage usage; however it will be preferred largely for non-core business data in the mid-market, the research house said.
In contrast, data deduplication offerings will be deployed gradually by the mid-market, owing largely to the cautious nature of Chinese organizations and the fact that many mid-market customers are still at the initial stage of storage systems usage, Springboard noted.
"The ongoing business environment has forced the Chinese mid-market sector to go slow on new storage investments and their limited budgets are being targeted at solutions that demonstrate short-term benefits, such as cloud storage offerings," said Bryan Wang, research director and Country Manager - Greater China at Springboard Research. "Mid-market organizations typically deploy a "just sufficient" storage solution, and vendors need to address these implicit demands smartly in order to be more successful in this market."
For the next five years, storage products with less than 1TB capacity will continue to be the largest group in terms of market share in China's mid-market, said the research firm. However, the fastest growing group will be products with storage capacities between 5TB and 10TB, representing 67 percent CAGR for the period 2008-2013, Springboard noted.
Growth of tape storage will be adversely affected by disk-based storage; however, tape will continue to have a place in the Chinese mid-market due to its cheap implementation, the analyst house said.
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