June 19, 2012, 10:33 AM — Storage software sales growth is slower than at anytime in the past two years, according to data released Monday by research firm IDC.
Worldwide revenue for storage software during the first quarter increased 3.3% year over year to $3.5 billion. While that was higher than the first quarter of 2011, revenues grew at a slower rate.
While there is still "healthy demand" for storage software products, the rate of growth within the market has slowed to levels not seen since 2009.
Companies with more than 1,000 employees made up the biggest component of storage software sales with $1.6 billion in investments during the quarter. Sales growth was flat, however, at 0.4% year over year.
Storage software investments within the government and education category were also relatively flat, experiencing only 1.2% year-over-year revenue growth. Small and medium sized companies - those with fewer than 500 employees -- drove a considerable amount of market growth during the quarter, increasing 8.8% compared to the first quarter of 2011.
"The first quarter saw decidedly mixed results," said Eric Sheppard, IDC's research director for storage software, in a statement. "Incremental spending attributable to recent product refreshes have run their course within some functional markets, such as storage infrastructure software."
Sheppard said continued fine-tuning of product pricing, packaging and messaging is helping to draw out new investments within other markets, such as the data protection and data recovery market.
EMC, IBM, and Symantec were once again the top ranking storage software suppliers with 24%, 15.7%, and 14.8% market shares, respectively. CommVault, with 26.2% year-over-year increases, and IBM, with 18.4%, experienced the largest organic growth during the quarter. HP's recent acquisition of Autonomy helped drive 72.6% year-over-year growth for the company during the quarter.
Meanwhile, sales of data protection/recovery and archiving software were the two fastest-growing sub-markets, with year-over-year growth rates of 5.5% and 5.0% respectively, according to IDC. Data protection/recovery and archiving software saw $1.25 billion and $411 million in total revenues, respectively.
IDC is owned by IDG, the parent company of Computerworld.