EMC is dominating the lucrative and fast growing market for purpose-built backup appliances (PBBAs), says a just-published Market Analysis report from IDC. PBBAs are disk-based backup appliances that are replacing tape backup in large enterprises and medium-sized businesses worldwide. The trend is driven by several converging forces, IDC says, including the need for faster backup, restore, and recovery and the development of a new generation of more effective storage optimization tools such as data deduplication and replication, which typically come pre-installed on PBBAs to control data volume growth.

The IDC report, Worldwide Purpose-Built Backup Appliance 2011-2015 Forecast and 2010 Vendor Shares, estimates the worldwide PBBA market at the end of 2010 at $1.7 billion and predicts that, baring a major financial downturn, it will grow at 16.6% compound annual growth rate (CAGR) to reach $3.6 billion annually in 2015. IDC’s research found that as of YE2010 EMC was the dominant player with 64.2% of that $1.7 billion, with IBM in second place at 16.5% and HP third at 4.7%. EMC also dominated the total PBBA shipped capacity, with 52% of the estimated total 468,000 raw Tbytes shipped. IBM had 8.3%, and HP, 10.5%.

IDC noted that several of the major players made key acquisitions to bolster both their technology and presence in this market. Specifically, EMC acquired Avamar in 2006 and Data Domain in 2009 and  “has done a very good job of selling those solutions through complementary channels as well as targeting existing EMC primary storage customers. EMC is particularly strong in the open system-attached PBBA market, while it is beginning to penetrate the mainframe-attached market with its recent acquisition of Bu-Tech.”

This is a direct challenge to IBM, which was the dominant player in the mainframe market in 2010. For its part, IBM was making “significant investments in its open system-attached ProtecTIER applications”, positioning itself to compete with EMC.

The report breaks out the eight leading vendors – EMC, IBM, HP, Oracle, Quantum, SEPATON, FalconStor, and Dell – and charts both their total revenues in this market and their total shipped Tbytes. One interesting thing that shows up in the comparison of the two charts is that while Oracle is fourth and SEPATON sixth in terms of revenues, they are sixth and eighth, respectively, in terms of capacity shipped, implying that their prices per Tbyte, at least in 2010, were significantly higher than the other major players.

EMC’s early lead gives it a major advantage in a high-growth market. If it can hold that lead against the onslaught of IBM and HP, it will further strengthen its position as the storage system leader in general and help it to maintain the major investments in R&D and M&A it will need in a period of rapid technological change in the storage arena in general. One major advantage it has over its competition is that it is a storage-only vendor. IBM, in contrast, has been publicly following a strategy of emphasizing growth in software and services for more than a decade. HP has made major investments in storage over the last five years, reinvigorating its storage line, but it remains a much more diversified organization overall, with major divisions ranging from PCs and office printers to professional printing presses.  However, PBBA is a very immature, high-growth market, and in such an environment both technologies and market positions can change rapidly.