Storage software and services prosper
Hardware sales still suffering from the downturn
The latest results from the storage sector reveal that software and services are holding their own, while hardware sales are still suffering the effects of the economic downturn.
Distributor InTechnology has posted promising results for the six months ended 30 September. The company is split into two divisions: the Storage Solutions and Services (SSS) division and the Online Data Services (ODS) division.
During the period the SSS business achieved a turnover of £72m, with an operating profit of £3.6m. The ODS division posted a turnover of £1.9m with an operating loss of £3.5m. But the division claimed that contracts worth more than £15m are in the pipeline.
Chief operating officer Steve Pearce said: "Our turnover showed only a marginal improvement, but we think this is still quite an achievement. It shows that storage is not a bad place to be."
He added that ODS was the firm's "sell-with" model, explaining that it is designed to give resellers a recurring revenue stream. "Although resellers were sceptical, more and more of them are taking it on board now," he claimed, predicting that ODS will be making a "positive contribution by the first quarter of 2002".
"For our performance we have not relied on hardware; you cannot just sell disk drives any more. We have been investing in the software side of things. Resellers have got to recognise the storage opportunity," he said.
Storage hardware vendor Network Appliance posted second-quarter turnover of $194.7m, compared with $260.8m for the same period the previous year. Total turnover in six months was $395.1m, compared with $491.9m last year.
Profit for the quarter was down to $7.7m, compared with $36.9m the year before. Six-month profit stood at $12.4m, compared with $69.5m last year.
However, storage management software vendor BakBone bucked the trend by posting an increase in second-quarter turnover.
The company reported a "consolidated" turnover of $2.3m, a 94 per cent increase from the same period last year, and a 41 per cent increase on the previous quarter.