Market Trends In Tape Technology.

The technologies are as robust as ever.

Some big industry names have declared tape technology "dead," but compact tape manufacturers are crying all the way to the bank. Tape technologies are as robust as ever, responding to customer demands for higher performance, capacity, scalability, and reliability in storage solutions. Tape's continued strong showing is also due to declining prices, higher capacity and data transfer rate, faster access, automated media handling, network attachment, and industry consolidation.

Declining Prices

Price declines are the norm in this industry as manufacturers and integrators experience constant pressure to reduce costs. Normal rates of price decline run about 5% to 15% a year with DAT and minicartridge products showing a compound rate of price decline averaging 33% (See Table).

Still, tape continues to be a profitable venture due to the economies of scale and to new products, which command a premium in the marketplace before they, too, experience a rate of decline. DAT, for example, is expected to show strong returns through 2001, when their revenue will reach $1.1 billion. It is expected to drop thereafter, depending on DDS' migration path following DDS-4 (if there is one). New products include the Ultrium and Accelis drives based on LTO standards. Analysts expect drives to ship an initial 46,000 Ultrium units at a revenue of $115 million. It's slated to reach 504,000 units and $703 million in revenue by 2005. This represents an installed base of 1.5 million by then with compound annual rates of 44% for revenue and 61% for units. Not bad for tape--in fact, not bad for anything.

Improvements

The market expects tape manufacturers to continually improve capacity and/or transfer rates and to do it with little or no price increase. The manufacturers follow suit by using longer tape lengths, higher recording densities, and lower tracks. This helps keep tape firmly to its successful market mission: to provide huge amounts of storage for pennies per megabyte.

Media and drive affect storage capacity. Media approaches include a longer length of thinner substrate tape or wider tape and high coercivity, while drive changes can include higher linear bit density, data compression, advanced encoding, and track positioning servo. Increasing bit density, heads and data channels also speeds up transfer rates, as do increasing drum or tape speed.

Tape is notorious for slow file access times, but what is acceptable on low-capacity, single drive tapes becomes impossible as per tape capacity rises or when tape drives are integrated into robotic tape libraries. That's when an average access time of 20 seconds to one minute-plus can seem like hours to a waiting user, but access improvements are available.

Automated Media Handling

Two factors are spurring automated tape handling products: accessing and storing massive amounts of data and the need for unattended backup operations. Autoloaders and libraries meet both needs and are important product lines for DAT, 8-millimeter and DLT products.

Tape is well suited for storing vast amounts of information as the media is cost-effective, readily available, and stable. (Of course, not even tape lasts forever, so IT departments do still need tape retention and migration policies.) Automated tape systems are particularly important to support the reality of 24x7 operations, including vital data functions such as file migration, archiving, media exchanges, and backup and recovery. Autochangers for DAT, 8mm, and DLT drives have been available since the early '90s, while Super DLT and Ultrium autochangers are slated for Q3 2000.

DAT autoloader shipments declined in 1999, but are expected to expand to a high of 73,000 units in 2003, peaking at $130 million in revenue in 2001. 8mm autoloaders should correspond to overall drive demand with shipments at about 4%-6% of drive shipments. With an installed base projected at 105,000 in 2005, OEM revenue will increase to $62 million in 2005. DLT autoloaders are experiencing a healthy growth of 8% with DLT drive shipments at a healthy projection of 77,800 shipping in 2005. Ultrium autoloaders are also expected to do well, accounting for 8%-11% of drive sales. Projections include 62,000 units in 2005 with $327 million in revenue the same year.

Network Attachment

Tape has been integral to DAS for years, but the growth of larger scale network storage solutions in mid-range computer systems is also driving sales. Often used in conjunction with RAID arrays or JBODs, tape subsystems serve as secondary or tertiary storage for files. Tape is particularly valuable in HSM environments, where files are moved first off the server to a disk array, then later archived to tape libraries. Units combining tape and optical libraries are also available.

Industry Consolidation

There's a lot of jostling in the compact tape manufacturer community right now, with the number of manufacturers standing at 15, down from a high of 46 in 1990. Mergers and acquisitions are common as elsewhere in the industry. Competition may stimulate new product development, but it also confuses users with a constantly changing selection of tape formats. The compact tape industry certainly has its challenges--threats from competing technologies with superior performance, pricing levels not always matching capacity/performance comparisons, limited automation in the face of Storage Area Network needs, and technology confusion. Yet where there are challenges, there are matching opportunities and the tape industry has never been shy about grasping the brass ring.