High Def Entertainment Should Lift Data Storage Firms

May 27th, 2011 by Trefis Team
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Data storage is among the fastest growing industries in the world and the segment has witnessed unprecedented activity in terms of M&As over the past year. EMC (NYSE:EMC) and HP (NYSE:HPQ) are currently the leaders in the total disk storage market followed by IBM (NYSE:IBM), Dell (NASDAQ:DELL) and NetApp (NASDAQ:NTAP). [1]

In recent years the advent of social media and increased user activity on the web has led to rapid increase in digital content creation and sharing, sparking a tremendous rise in demand for data storage.

Large Sized 3D Videos and High Resolution Images to Drive Demand

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According to a report from IT consultancy firm Coughlin Associates, [2] as image resolutions increase and 3D video becomes  a more common format, storage systems sales for the entertainment and media industry could grow rapidly from $3.8 billion this year to $6.4 billion through 2016.

From 2011 to 2016, the media and entertainment industry will see a more than five-fold increase in storage capacity shipments from 11.2 exabytes to 62.7 exabytes. An exabyte is 1,000 petabytes or one billion gigabytes. Coughlin estimates that about 39% of the total storage media shipped in 2011 for all the digital entertainment content segments will be hard disk drives based, other formats being tape, optical and flash memory. [3]

We currently estimate that total disk storage shipped will increase five-fold from an estimated 23 exabytes in 2011 to over 120 exabytes in 2016 (with content archiving and preservation making around 50% of the total disk storage capacity shipped), which is in line with the above trend.

You can drag the trend lines above to see the impact of various scenarios for total external disk storage on EMC’s stock value.

See our full analysis for EMC’s stock here

Notes:
  1. Worldwide Disk Storage Systems Finishes 2010 with Double-Digit Growth, IDC [↩]
  2. 2011 Digital Storage for Media and Entertainment Report, tomcoughlin.com [↩]
  3. High def in entertainment will mean a 7X data storage increase, computerworld.com [↩]