The call for greater storage capacity and productivity has continued to rise sharply, as microprocessors have grown faster, software applications have become more resource intensive, and network computing has become more popular. Attempts to augment processing power and give users more capabilities have made the ordinary new software application necessitate vastly much more storage space than earlier versions. On personal computers, storage needs have further transformed and multiplied as a consequence of rising multimedia features and content, such as DVD movies and downloadable music on the Internet. At the same time, corporate systems were required to manage mounting storage and processing needs from internal users, as well as from the Internet.
Freight values for computer storage appliances and equipment like tape libraries, which equaled $9.0 billion in 2000, fell to $8.2 billion in 2001. At that time period, around 66 companies competed in the domestic market. Notwithstanding the numerous forces stimulating demand for storage devices, the industry, like other computer hardware sub industries, has been adversely affected by aggressive price competition. Such pressures have prompted substantial consolidation into the industry and have led to price cutting at several storage device companies. In addition to increased price competition, the market for storage devices was affected by a weak economic climate in the early 2000s. This laid out challenges across practically every product segment in the computer industry, as manufacturers dealt with less spending and determination levels in both the consumer and corporate sectors.
The computer storage industry continued to face both challenges and opportunities associated with storage outsourcing services, or storage service providers, or SSPs, starting in early 2000s. These remote services sell storage space and management tools that subscribers can simply connect to and use, making it possible for companies to avoid investing in and managing storage hardware and software themselves. At the start of 2000s, the nascent SSP field was transforming how storage devices are applied and marketed. It also presented an opportunity for storage equipment companies to branch into services. By 2001 telecommunication industry leaders like World Com and AT&T were competing in this sector. Around the globe, IDC, a consulting service in technology intelligence and industry evaluation, forecast spending on SSPs to increase from $150 million in 2000 to $10.5 billion in 2005, according to Computing Canada. This boost reflected a compound annual growth rate of over 134 percent.
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