IDC issues reality check to storage industry

Analyst kicks off Storage Networking World in Frankfurt with stark warning that storage is not 'recession proof'

Frankfurt warning

Analyst IDC has kicked off Storage Networking World (SNW) with a reality check for the storage industry.

Taking place in Frankfurt this week, the research firm addressed an audience of resellers, vendors and integrators on the looming recession.

According to recent research from IDC, global hardware spending cuts is expected to affect PC sales, but the analyst predicted storage is the least likely to experience budget cuts.

However, Claus Egge, analyst at IDC was eager to say: “This does not mean storage is recession proof - Many think it is, but is it not. There is pricing pressure being placed upon all areas of the market.

“From our research storage is not a bad place to be at the moment, but you will have to change your behavior as your customers’ behavior changes.”

He added: “Reality check – there are opportunities but it is about changing to understand the customer better.”

Egge advised vendors, resellers and integrators to stay involved with customers, even though budgets are frozen, and to ensure the channel is engaged with their customers during the recession.

“Do not walk away from an opportunity if the customer is not very well off at present – offer them something they can afford, maybe a one-off discount, and they will not forget the trust you built with them during tough times,” he said.

Egge also urged companies to capitalise on the surge of recent mergers: “Companies are merging all over the market – if this occurs who will merge the IT departments into one? The reseller will.”

Carla Arend, program manager for software and services at IDC, said data protection and retention (DPR) currently has the largest market segment (32 per cent) in Western Europe; however surprisingly virtualisation is underperforming.

She also revealed how IT support is expected to decline in growth, from 2007-2012: “Support is normally provided with hardware sales, so if hardware is stagnant due to price pressures then it will affect support also.”

Serena Da Rold, program manager for vertical markets at IDC, highlighted health, utilities and the government as growing sectors for storage and predicted that transport, manufacturing and financial services will experience decreases in growth.