NEW YORK, Sept. 20--Total data storage-related industry revenues are expected to increase approximately 5% for full-year 2004, says Standard & Poor's Equity Research in a new, semiannual study of the industry.
Since data storage has become a high priority for corporations, the sector is expected to grab an increasingly larger share of corporate IT budgets, which themselves are rising along with the expanding economy. The study, Industry Survey on Computers: Storage and Peripherals, will be published twice yearly by Standard & Poor's, the leading provider of independent investment research, ratings and indices. It joins the Industry Survey series of reports covering 51 other industries.
This projection for steady growth, which includes disk systems, components, tape, services, and software, follows a notable industry turnaround in 2003, in which the Standard & Poor's Computer Storage and Peripherals Index gained 79%. The optimism is tempered however, by near-term industry challenges including the potential for severe pricing declines, and unresolved geopolitical issues that may rein in corporate spending.
"The data storage market has reshaped itself since 2002, and is increasingly emphasizing its capabilities with respect to the management and organization of data," says Richard Stice, Computer Storage and Peripherals Equity Analyst with Standard & Poor's Equity Research Services and author of the report. "Standard & Poor's views this move as a prudent one, given the mounting need for companies to better use their existing IT resources. As storage industry firms spell out the importance of these features to potential customers, we believe this will create new avenues of growth for the industry."
Standard & Poor's Equity Research Services currently maintains a neutral outlook on the Computer Storage and Peripherals sub-industry. Year to date through September 10, these companies' stocks were down 6.2%, versus a 1.4% gain in the S&P 1500 Index.
