- Published on Wednesday, 12 October 2011 09:58
- Written by Marc Hebert
A very timely report just came out by Gartner providing an update on the state of the database archiving market, with five-year growth projections. It resonates very well with what we are observing in our EDM practice. Highlights:
- The total size of the global database archiving market is still fairly small—under $200MM in software license revenues in 2010
- All of the market share is owned by four software vendors: IBM (with its Optim Solutions acquisition), Informatica (with its Applimation acquisition), HP (with its OuterBay acquisition), and Solix
- IBM’s market share has increased dramatically since the last IBM report in 2008, from ~45% then to 76% in 2010, almost 5X the nearest competitor (similar to market share numbers published by IDC last February for 2009)
- The market penetration of these products is still very small. Gartner estimates that there are 2,400 customer installations in 2010. My rough estimate is that companies over $250MM in revenue are candidates for data archiving. I guess that there are somewhere between 25-50,000 companies of this size or greater in the world, which puts the market penetration of data archiving software at 5-10%
- Moreover, in our experience, many data archiving software customers have purchased software only for one or a few of their target applications, and ultimately will expand its use to the enterprise, as well as use other flavors of EDM software, such as application retirement, test data management and data masking
- Gartner projects the database archiving market will grow 20% per year compounded from 2011-2015, suggesting healthy growth (even more internationally than in the U.S.)
- Key drivers of this growth, based on Gartner research, are sluggish application performance due to what we call “data cholesterol” in production applications, and the growing cost of labor for managing production applications and copies of them used for non-production purposes
- In addition, the “storage is inexpensive” approach to dealing with data growth is no longer viable in many IT organizations, given the tight budget environment, even though Moore’s Law continues to drive down the cost of storage dramatically
- There is one other key driver in large organizations—the growing backlog of applications sitting dormant in IT departments, no longer in production use but kept around for various reasons, costing big dollars in hardware and software licenses and labor. Gartner cites research indicating backlogs of 1,500-2,000 such applications in many large organizations ready for retirement through archiving, with huge potential cost savings
- Customers cite high satisfaction levels with database archiving products and vendors, reinforcing the market growth opportunity
As mentioned above, this report resonates well with our own EDM practice, which continues to grow nicely this year, despite a tough IT budget climate. This is one of those countercyclical trends driven by hard dollar cost savings that will only get better in the coming years. And, the regulatory climate is accelerating interest in data archiving, with data governance initiatives sprouting in many of our clients and prospects, not only to reduce cost, but to better comply with data retention policies and data privacy requirements.
Not only do we concur with Gartner’s growth projections, but we also expect that more of our clients will adopt formal data governance infrastructure, as reflected in our recent blog posts: Enterprise Archive Repositories, Archiving and Application Retirement Factories, and EDM Competency Centers.
For those with Gartner subscriptions, the report is entitled, “Market Trends: World, Database Archiving Market Continues Rapid Growth, 2011,” by Sheila Childs and Alan Dayley, published September 16, 2011.