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Online storage market set to explode

Online storage market set to explode

Global online backup services are poised for growth, according to research company IDC.

The growth will be fuelled by a combination of factors, including the tremendous growth in digital data generated by both individuals and small businesses. IDC said it estimated that revenue for this emerging market would reach US$715 million by 2011, representing a 33.3 percent compound annual growth between 2006 and 2011.

Over half of the spending in this market will be in North America at first, but other regions will increasing their share through 2011, said the company. IDC also predicted that adoption by consumers and small businesses would dominate the market for several years with slower adoption by medium-sized businesses and enterprises, but that revenue growth will slow in 2010. By then, according to IDC, services practices begin to standardize, competition will hinder price rises, suppliers will consolidate, and online backup will have become a built-in feature in some online and web-based services.

IDC said that online storage began its transformation in 2007 from a simplified backup option for consumers and small businesses to an offering that can enable larger businesses bolster disaster recovery operations, regulatory compliance needs and help curb storage infrastructure costs. Even Google is reportedly interested in building online storage technology to take advantage of the lucrative market.

"Consumers and small businesses especially are interested in alternative methods of protecting their data, as traditional backup methods fall short regarding efficiency, reliability, and ease-of-use," said Doug Chandler, research director for storage services at IDC. "Online backup has become an attractive approach for many customers, with the advent of cheaper broadband access, users' greater comfort level with web-based services, and the growing business need for a second site for remote data protection purposes."

The new report follows a more wide-ranging storage report, released in late December 2007, where IDC envisaged new data storage models such as object-based storage, green storage technology, which helps companies reduce their carbon footprint and energy expenditure.


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