Secondary Hiccups

Blame it on the recession or the churning (at the level of players
redefining strategies and trends) that shook up the market. From a
rampaging 48% growth in the FY’08, it went down to 7% in the
last fiscal.



Quantum's exit from India (after it shut its sales operations) was
quite a setback – as it has been a key player in the back-up
recovery and archive hardware. Though the good news was that Quantum,
shut down its sales operations in India in Jan, '09 and did not touch
its R&D Centre wasn't touched and the customer support
services, underlining the fact that the company even during these
troubled times, continued to stay focused on technology and product
development being the critical player.



It also invested $10 mn to set up its development center at Hyderabad
during the FY '08. On the service front, Quantum continued to provide
customer support services including 24x7 telephone support up to 24x7x4
onsite gold support, depending upon the product and service agreement.
 



Even though Quantum continued its R&D centre and customer
support services, its market share went down drastically from a 16% to
just about 6% (acc. to DQ Top 20 estimates). This went in favour of HP
and IBM, as their market share considerably went up.



This was particularly an important development, as over the last few
years, Quantum, Storage Tech, and Advanced Digital Information
Corporation (ADIC) have been three important players in the secondary
storage industry. While Storage Tech was bought over by Sun
Microsystems (which has now been acquired by Oracle), ADIC was taken
over by Quantum, however now with Quantum’s exit, it would be
interesting to see how the market shapes in the current fiscal. Quantum
though has now chosen the partner strategy to go-to-market in India.



NetApp too is gearing up for a bigger share. “In the fiscal
we have made an announcement about our intention of acquiring Data
Domain that specializes in disk-based assortment,” says
Rajesh Janey, country manager NetApp India.



However, tapes still continued to be an
integral part of the backup, recovery and archival strategy of most
companies. As per IDC, the tape automation market in India in 2007 was
around $67.45 million, while tape drives accounted for $60.82 million.
IDC trusts the Indian tape market to grow at 5.6% (CAGR 2005-2010),
which is the highest in the Asia-Pacific.



Tape encryption caught up the imagination of the Indian markets though
it did not take off in a big way. The bigger movement that was
contributing to this was the large businesses moving towards
consolidation of their storage, and the rising threat perception with
that. Tape drives supported encryption not only at the tape level but
also at the autoloader level facilitating multiple levels of
encryption. “As the data addressable is highly portable, tape
encryption is something more and more banks got convinced about. We at
IBM incorporated tape encryption in a big way during the
year,” says Shailesh Agarwal, Vice President, Sales Programs,
IBM STG -India/SA.



On the Virtual Tape Libraries (VTLs) front also, there was some
adoption of this category amongst enterprises in FY ‘09.
De-duplication was another major trend that did define the market
dynamics. Many of the IBM and HP customers asked for de-duplication
solution so that they could free more storage.