AMI-Partners: Storage Investments to Cross US$2B in Japan, Germany.

Medium businesses in Japan spent US$980m - and in Germany US$790m - on data storage last year, says AMI

NEW YORK -- Storage is the fastest growing area of investment among MBs (medium businesses, or companies between 100 and 999 employees) due to growing demand for data capacity and backup requirements. This is especially so in two of the most industrialized economies - Japan and Germany - where MBs are set to invest US$2 billion on storage products and services this year, up some 14% (Japan) and 12% (Germany), according to the latest report by New York-based Access Markets International (AMI) Partners, Inc.

"To meet the growing demands of data capacity and network users, secure storage solutions like DAS (direct-attached storage) and SAN/NAS (server/network-attached storage) usage are on the rise," says AMI's Nichelle McKenzie, New York-based Research Analyst. "As storage hardware and management demands and expenses escalate, medium businesses will seek new secure ways to distribute storage to multiple servers and consumers by allocating storage on a network."

German MBs spent US$790 million on storage while Japan MBs spent US$980 million last year. Among German MBs, DAS (over a third of server LAN MBs) and NAS (nearly a quarter of server LAN MBs) are the most widely used technologies. In Japan, MBs regularly back up their LAN servers. The most common methods for data backups are tape (for servers) and external disks/hard drives (for individual PCs). Currently, Japanese MBs are using DAS and SAN at a higher rate than German MBs.

"Hoping to combat the growing volume of data primarily generated from CRM and ERP applications, MBs are adopting more advanced types of network storage media such as SAN and NAS," says Ms. McKenzie. "We will see an increase in the number of MBs in Germany and Japan using advanced storage solutions such as SAN in 2008. Over a quarter of Japan MBs plan to adopt either IP channel or Fiber channel SAN for a storage solution compared to one sixth of German MBs. MBs in these regions that have been in business for a longer period of time tend to invest more in secure storage on an annual basis."

MBs have larger storage needs, compared to small businesses (companies between 1 and 99 employees), and with that comes increasing security concerns. "MBs need to manage substantial quantities of data in a secure and organized manner," says McKenzie. Data archiving requirements, due to regulatory compliance, is also an important driver steering these MBs to invest in secure storage solutions. "Japan and German MBs' focus towards secure storage is also indicated by business strategy-about three out of four in Japan and over half in Germany reported that enhancing IT security is important," McKenzie adds.

Nearly two thirds of Japanese MBs and almost half of German MBs felt deploying in-house data backup and recovery solutions, and adding IT storage solutions, were key motivators for structuring their IT budgets last year. Increasing IT storage capacity and deployment of enhanced secure storage solutions will continue to be a primary strategic focus area for them in the next year.

In 2008, MB secure storage investments will be influenced by the increasing use of business applications software such as ERP and CRM that require huge storage capacities. Japanese MBs expect their storage capacity to grow 13% in 2008, while German MBs expect an 11% growth. In Japan, the preferred storage vendor by MBs is Buffalo/Melco, and in Germany, this vendor is Hewlett-Packard.

Related Studies

AMI's 2006-2007 Japan Medium Business Market Overview and Comprehensive Market Opportunity Assessment and 2006-2007 Germany Medium Business Market Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI's annual surveys of MBs in Germany and Japan, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, please call 212-944-5100, e-mail [e-mail], or visit the AMI Web site at www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- with a strong focus on global small and medium business (SMB) enterprises and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets, its annual retainership services based on global SMB tracking surveys in more than 25 countries, and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.