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Storage Industry Overview

The attributes of storage industry:

1. It is US based market monopolized by few players with high market entrance

barrier.

2. It is in technology innovation period with high technology entrance barrier.

3. Long product life cycle with loyal customer.

4. An industry with technology-oriented and brand name service-oriented nature.

5. An industry with focused strategic alliances.

Industry trend:

1. Storage system/software steps into vertical integration market

System giant supplier steps into software and integrated service market

storage

storage system

Storage software

Sales service

storage system

Storage software

Integrated counseling

service

storage component

Value added

III

In the pyramid industry, system giants gradually move from the second layer to the third

layer sub-industries, they step into storage software management market which has

higher profit. They try to create value through vertical integration and build up the

entrance barrier higher; for long term speaking, storage system giants will head

toward the service market of vertical integration such as: providing integrated and

value-added product and service such as: server, storage system, software and

hardware, network components.

Unit: mullion UD dollars Global storage industry market (2001~2006)

10000

20000

30000

40000

50000

60000

70000

80000

2001 2002 2003 2004 2005 2006

Storage component

Disk storage subsystem

Magnetic tape storage

Storage software

Integrated software

Source: IDC, Worldwide Disk Storage Systems Forecast and Analysis, 2002-2006.

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