Sun buys into fast-growing storage market

Sun Microsystems Inc.'s $4.1 billion purchase of Storage Technology Corp. of Louisville, Colo., announced Thursday is taking place against the backdrop of a rapidly growing data storage industry.

The global market for magnetic and optical storage materials, estimated at $19.8 billion for 2005, is expected to double to $39.9 billion in 2010, which represents a 15 percent annual growth rate, according to a report from Business Communications Inc. research firm in Norwalk, Conn.

The technologies for data storage include magnetic tapes and hard disks, optical products read by lasers including CDs and DVDs and hybrids of the two.

Most of the projected growth is in optical media, which would expand from a $9.6 billion market currently to a $30 billion market by 2010, the study showed.

StorageTek's focus is on magnetic media, which is growing less rapidly than other parts of the data storage market. Magnetic media would rise from $7 billion to $9 billion during the five-year period.

Factors contributing to fast-paced growth in data storage include increasing demand for disks for personal computers and electronic products, strong sales of DVD movies and the popularity of high-definition TV requiring high-density optical storage media.

Optical storage media such as Blu-ray, and HD-DVD, holographic and near-field storage are not a significant portion of the market now but will account for 4 percent of the market by 2010, Business Communications predicted.