(EMAILWIRE.COM, August 07, 2003 ) CEDAR KNOLLS, NJ - Just as in the hosting market, the number of players in the storage services arena is dwindling, with the majority of the original participants now focusing on software rather than services. The market continues to be rife with mergers and acquisitions, with many exiting and few seeing any real success in the space, according to a new report from Probe Group LLC of Cedar Knolls, NJ. The most recent issue of Worldwide Hosting and Managed Services Markets, "Storage Services Market," examines the market for outsourced storage services, the technologies and vendors in place in service provider networks, and the main players offering storage services.

According to Liz McPhillips, Research Director at Probe, although the cost of storage media is falling, the increase in data volume and the heterogeneous nature of the data is making storage management increasingly complex and expensive. "Because the majority of costs lie in human involvement, overall spending should be increasing. However, at the same time, many companies are cutting their individual IT groups, thus making it increasingly difficult to sustain a suitable level of management for the storage resources," said McPhillips. Hence, there is a potential customer base that can no longer afford to manage its storage needs in-house and will look to outsourcing to fulfill requirements. In the short term, many customers will probably outsource their backup and disaster recovery needs, while keeping primary storage in-house.

As far as storage technologies and media go, NAS and SANs will coexist, complementing one another, and although DAS will not disappear completely, it will probably only remain useful in standalone networks. While disk will become the dominant storage media, tape will remain in use for archiving and other purposes that do not have high-performance requirements.

The storage services market itself looks very different from how it did two or three years ago. The only remaining start-ups still offering services are Arsenal Digital Solutions, MSI and Scale8, with the major players being IBM, EDS, AT&T and Equinix. Most other large service providers such as Cable & Wireless and BellSouth have exited the market or are in the process of doing so.

About Probe Group LLC
For over 26 years, Probe has leveraged its unique insights and extensive experience in both the traditional world of telecommunications and the burgeoning world of data and packet networks to offer clients sound counsel and realistic market forecasts. Probe has successfully maneuvered clients through changes in demand, demographic shifts, introduction and evolution of new technologies and platforms, industry structure transformations and financial market volatility. Probe provides clients with expert guidance through continuous research services, consulting projects, retainer programs and a variety of other direct analyst-access services. - # -

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To obtain more information on the report, "Storage Services Market" (WHMSM, Vol. 1, No. 2), the Worldwide Hosting and Managed Services Markets service, or to arrange an analyst interview, contact Karen Verrinder or visit Probe on the web at www.probegrp.com.


Contact:
Karen Verrinder
Public Relations Manager
Tel. 973.285.1500, ext. 227
E-mail: mailto:kverrind@probegrp.com

Contact Information:
Probe Research, Inc.
Joseph Nchor
Tel:
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