Prices drop, revenue jumps, and capacity surges in a Central and Eastern Europe hungry for storage, says IDC

PRAGUE, CZECH REPUBLIC – FEBRUARY 2, 2006 – A 41.2% drop in price per terabyte in 2004 did nothing to slow revenue growth in the Central and Eastern European market for disk storage systems. According to a new IDC study of six CEE countries (Croatia, the Czech Republic, Hungary, Poland, Russia, and Slovakia), vendor revenue for disk storage rose a healthy 7.4% in 2004 and an estimated 10.8% in 2005 to more than $587 million. Preliminary data suggests capacity will shoot up by more than 30% in 2005 as organizations scramble to keep up with the continuing flood of data. For external storage, growth was even higher, with 2005 revenue up an estimated 18% to almost $428 million and capacity up by more than 42% to nearly 14 petabytes.

"Limited budgets and a slowdown in the tender market mean the action is shifting from larger corporations to the dynamic SME segment," said Philip Korinek, senior analyst, storage, IDC CEMA. "International vendors have adapted by developing flexible and competitively priced solutions that can be quickly installed and easily upgraded."

At a little less than a third of the market, Russia accounted for the largest share of disk storage revenue in 2004 and will again in 2005.

Poland ranked second and the Czech Republic was third. Together, these three countries represented around 73% of revenue in 2004, with preliminary data suggesting they will again be the top 3 in 2005. Over the next few years, IDC expects Croatia to be the most dynamic market in terms of both revenue and capacity.

"Data influx and swelling databases are not the only thing driving the storage markets," said Korinek. "For instance, corporations now employ applications for everything from email to graphic design to video streaming as part of regular operations or for sales and marketing endeavors. In addition to their massive memory requirements, these applications generate new data types that can eat up copious amounts of space."

In terms of overall storage revenue, three players dominate the storage markets of Central and Eastern Europe: HP, EMC, and IBM. In 2004, although HP held on to its position as the top storage vendor, it had to cede ground to EMC, which took first place in the dynamic external storage market. IBM took third overall. Together, these vendors captured more than 86% of market revenue in 2004.

"While internal storage still commands a healthy part of the market, it's external storage that is hot and really growing fast," said Korinek. "For storage-only vendors, however, this is not necessarily the boon it might appear to be. Users in CEE tend to purchase storage from their suppliers of server infrastructure. To grab a larger piece of the pie, these storage-only vendors need to align themselves with integrators and other solution providers."

IDC expects the amount of data pouring into organizations to continue to accelerate over the foreseeable future. As a result, demand for storage will stay strong, with revenue growing nearly 20% in 2006 and 18.5% in 2007. Moreover, capacity will shoot up by more than 39% in 2006 and 31% in 2007.

IDC's Central and Eastern Europe Disk Storage 2005-2009 Forecast and 2004 Vendor Shares study (Doc #EST1M, December 2005) provides detailed analysis, conclusions, and forecasts regarding the dynamics of the disk storage markets in Croatia, the Czech Republic, Hungary, Poland, Russia, and Slovakia. The information in this study is intended to provide an understanding of the changes and opportunities facing the storage industry in these countries. IDC's figures and analysis are based on information gathered from interviews with the leading IT companies (vendors, distributors, assemblers, system integrators, value-added resellers) in the markets.

For more information, please contact Tatiana Hinova at +420 221 423 140 or at thinova@idc.com.

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

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