Old IT still has its charms
5 November 2001

When it comes to glamour in the data storage sector, tape finds it hard to compete. But a spate of new products and intensifying competition are helping the sector to shake off its dull image.

Trendier formats such as compact flash memory, DVD and holographic storage cannot help but make the lowly plastic cassette look like yesterday's archiving solution. "If disk storage technology has been perceived as being dull, tape storage technology has an even lower excitement rating," says Alastair McAulay, analyst with PA Consulting Group, the consulting firm.

The steady decline in tape system sales reinforces popular opinion. A new study by Freeman Reports, the California-based storage industry consultants, shows a 31 per cent decrease in unit shipments of compact tape drives in 2000, a drastic decline even by current technology sector standards.

Meanwhile, Quantum Corporation's strong dominance of the tape storage market in recent years with its Digital Linear Tape format (DLT), has contributed to the lacklustre feel. Quantum maintains a 38 per cent revenue share, with H-P holding second place at 18 per cent. Of Quantum's $1.4bn revenue for 2000, some $1.1bn came from the DLT platform.

Despite evidence to the contrary, tape is still considered by many to be the most dependable information backup system in these data-heavy times. Industry statistics demonstrate that organisations continue to buy tape technologies for archiving purposes. "By itself the tape backup and archive market has revenues between $3bn-$4bn per year with very good margins," says Thomas Coughlin, a data storage consultant.

"Though tape system shipments will show continual decline, due to increased pressure from alternative products such as disk drive-based backup systems, tape will nevertheless be a significant source of revenue and profit for several more years," he says.

The origins of data storage lie in IBM's pioneering development of tape technologies in the early 1950s. In 1953, IBM produced the 2400ft tape reel, which remained the industry standard until 1984, when the company introduced the half-inch tape cartridge. As recently as a decade ago, the choices for network backup were simple, consisting of quarter-inch, 8mm and 4mm options.

Since the late 1990s, Quantum's grip over the industry has begun to relax, with a number of competing tape storage formats gaining popularity, such as Sony's Advanced Intelligent Tape (AIT) and Exabyte's Mammoth products. Companies such as Seagate, Sony, H-P, IBM, Exabyte, Tandberg, Imation and StorageTek all wrestle alongside Quantum for market share.

To indicate just how fierce the competition can be, Imation filed a $450m antitrust lawsuit against Quantum in early October, accusing the storage leader of price fixing and conspiracy to monopolise the production and sale of tape compatible with Quantum's DLT tape drives. Quantum denies the claims.

In a market driven by compatibility between drive products, data transfer rate and hard disk drive capacity, Quantum's most powerful adversary has been the product of an alliance between Seagate, IBM and H-P. In 1997, the triumvirate set out to develop a rival technology to DLT: Linear Tape Open technology (LTO).

LTO is a high-performance open tape standard available for licensing to outside parties. The technology is called "open format" because it serves multiple products across several media. LTO is seen as a major advance in tape storage technology not only because of its high capacities and transfer rates, but also because it allows the exchange of cartridges between manifold vendors.

LTO Ultrium is the most powerful LTO technology around today. It uses a single-reel media, with native (that is, uncompressed) capacities of up to 100GB (gigabytes) and native data transfer rates of up to 20MB (megabytes) per second. The idea behind LTO is a standard that will be the foundation of future tape drives.

Meanwhile, Quantum has leapt into the so-called "super drive" market with its own high-capacity solution, SuperDLT. The first of a new generation of SuperDLT drives, the SDLT 220 operates at a native capacity of 110GB and a native transfer rate of 11MB a second.

"By 2007, SuperDLT drives will have the ability to accommodate more than a terabyte of data - the equivalent of more than 300 digitalised feature-length films - on a single cartridge in just over three hours," says Franco Mezzullo, European vice president for sales and marketing at Quantum DLT Group.

While DLT continues to be the preferred format for mid-range and high-end archiving applications, LTO is already being accepted as a standard in Europe. In September, the European Computer Manufacturers Association (ECMA), which specialises in the standardisation of information and communication systems, officially adopted the LTO Ultrium format as a global standard for tape storage.

According to a July 2001 study by Freeman, super drives such as SuperDLT and LTO Ultrium will become the highest source of tape revenues over the next five years. The report predicts that by 2006, super drive technologies will comprise 84 per cent of unit shipments and 96 per cent of compact tape revenue.

The super drive market is being driven by the trend towards data centralisation, owing to the exponential growth of data. With enormous data management issues, almost all digital tape drives are now used as part of tape library systems.

Although the big vendors still consider tape storage to be a worthwhile investment (in early November, Seagate, H-P and IBM announced the availability of second generation LTO licenses), tape is being increasingly seen as just one cog in a multimedia data backup machine.

"As our customers increasingly look to a wide array of data storage formats to meet their requirements for backup and archive, it is important for us to offer a full array of media solutions," says Kevin Henderson, director of branded data technologies of Sony Electronics' Core Technology Solutions Company.

Following the September 11 attacks on New York and Washington, the role of tape storage in disaster recovery has become a topic of interest within the industry.

"In the aftermath of the attacks, the interest of IT management in backup and other disaster recovery planning is likely to increase," says Mark Ferelli, editor in chief of Storage Management Solutions magazine. "All of mass storage should be positively impacted. But tape in particular, due to its reliability, affordability and flexibility, is likely to see an upswing."

© Copyright The Financial Times Limited 2001