Tape revenue dropped 25% last year, but..

Chris Mellor wrote an article a few months ago that basically predicted the death of tape by 2014.  The basis of the article and the prediction was an executive summary of a market analysis report from the Santa Clara Consulting Group, (SCCG), “the leading source of market information relating to the removable data storage industry for more than 25 years,” even though I’ve never heard of them until this article.  (Am I alone here?)  The report mentioned that tape revenues were down 25% in 2009, and Chris extrapolated that if this were to continue, the tape business would cease to exist by 2014.  I was going to write a blog post about that back then, but forgot.  Pierre Dorian wrote an article about the future of backup tape that also sourced this study so I was reminded that I wanted to take a look at the numbers in this report and see if I can make sense of them.

Other bloggers (and comments on Chris’ original article) have suggested that you’ve got to take in other factors, mainly the global recession.  So I thought I’d look at tape’s close cousin – disk.  This IDC report says that external disk revenue decreased by 10.2% in 2009, and overall disk revenue decreased by 11.9%.  What would this mean to the tape business?  Fewer disks means fewer to back up, right? So it would seem that you could write off about half of the 25% drop as being due to the effects of the recession on the overall storage business.

Let’s also consider the effect of the increases in tape size we’ve had over the last few years.  You can now by an LTO-4 tape for about the price of an LTO-3 tape a few years ago, and it stores twice as much data.  Please note that  the report shows that LTO is the dominant media type, and LTO-4 is the dominant version of LTO. It also mentions that LTO-5 has barely taken off.  When it does, another drop in capacity will result in a drop in media revenue as people store more and more data on fewer and fewer tapes.  This will, of course, be countered by more data to be backed up,  But I think this increase in media capacity could easily be blamed for the other half of that 25% drop.

If I’m right, and half of the 25% drop came from the recession and the other half came from increased media capacities, then basically that means that people really haven’t decreased the amount of data they’re putting on tape.   They may be doing as best as they can to better utilize what they have, but to me, these numbers don’t seem to demonstrate the massive move from tape to disk that everyone seems to think is going on.

Yes, more people are backing up to disk than ever before — but they also seem to be keeping a copy on tape.

this blog post!

9 thoughts on “Tape revenue dropped 25% last year, but..

  1. ChrisFricke says:

    Granted I’m only one “customer/consumer” but I can tell you we have not decreased our use of tape. We are augmenting our tape with disk backup and have also upgraded our tape library (finally) from LTO3 to LTO4 which has lead us to own fewer tapes (currently). The amount of data going to tape overall, however, is increasing – not decreasing.

  2. josephmartins says:

    It seems that every few months some prophet predicts the death of tape. How many years have we been reading about it?

    Eventually they’ll be correct, at this rate posthumously.

    Frankly, I believe these buzz writers attempt to create controversy solely to drive traffic. Just one of the many reasons that I ignore 99.99% of their content.

  3. tarheel says:

    I have been working on a project for 2 years to get rid of tape from my company. As of now, we are 95% Virtual Tape and 5% real tape. Hope to have all tape out of the shop by end of year

  4. cpjlboss says:

    @Storagezilla has a great quote that at the end of the world, there will be an IBM sales rep selling mainframes and another guy selling tape.

  5. mvarre says:

    The fact that the evolution of LTO technology has brought with it bigger tape sizes and faster speeds doesn’t negate the fact that the same thing is happening with disks. All of a sudden users have 300GB+ drives in their desktops, and the creation of new data is faster now than ever before.

    Could we assume the same for the same for the 11.9% decrease in disk revenue? Are these revenue decrease numbers on a per GB/TB basis or per single piece of media?

    What I’d like to see is a comparison of the amount of data being created today and revenue on per GB/TB for tapes. Number of disks or tapes being sold, or really even the revenue for them seem to be irrelevant.

    Just my 2 cents…

  6. cpjlboss says:

    I agree that the per MB price of disk has fallen along with the per MB price of tape, but I do believe that tape prices have fallen sharper. I may be wrong, except maybe for the desktop SATA market. It wouldn’t be the first time. 😉

  7. nieboer says:

    Mind you, based on their logic, at a decline of 11+%, the disk business will cease to exist by 2020.

    Then again, maybe everything will be on flash and SSD by then!

  8. jm7640 says:

    In my environment the choice is not tape or disk; the choice is tape or electronic vaulting.

    The original backup, copy1 is written to disk through some transport (file system, vtl, nfs). That backup image on disk (copy 1), needs to be protected from a local disaster so it is either electronically vaulted to a remote data center or it is duplicated to tape and taken offsite.

    The new NetBackup domains we build out utilize a pair of SL8500 with LTO5 for offsite duplication. My reports are showing about 100TB/hour throughput with this configuration. (220MB/sec X 128 drives X 3600 sec). Remember we are duplicating from dedicated disk storage units to tape so speed is optimized.

    Depending on the data center I may have up to four netbackup domains to handle the data backup which would equate to around 400TB/hour of protected offsite backups.

    That kind of offsite throughput is not available to me over the network to a remote disk array.

    Even though my WAN costs are quite low compared to most companies it is still compelling to use tape even considering all the staff and processes that go along with tape usage.

    So then the comparison should be the TCO of using tape for offsite backup compared to the TCO of using offsite replication (electronic vaulting).

    My conclusion is that tape is not going anywhere.

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