Data Storage Firms Put Faith in Consumers

With recession-conscious businesses spending less on storage hardware and software, tech firms EMC(EMC) and Hewlett-Packard(HPQ) have fixed their sights firmly on consumers.

For years, consumers have been using storage technology such as USB drives to back up documents, although tech firms are now touting much more sophisticated systems that can store and share the likes of movie and music downloads.

EMC, for example, will launch products aimed at homes and small business at the Consumer Electronics Show this month in Las Vegas. The Hopkinton, Mass.-based firm plans to unveil 1-Tbyte and 4-Tbyte versions of its recently launched StorCenter ix2 system in an attempt to tap into the explosion in consumer data, according to Joel Schwartz, senior vice president of EMC's common storage platform operations.

The data storage bellwether is now extending its reach well beyond its traditional enterprise customers such as Microsoft(MSFT) and General Motors(GM), he said.

"We kind of figured out that there will be more data stored at home than there will be in business," explained ScHwartz, adding that consumers are looking for somewhere to store their digital photos, MP3 files, financial records, and movie downloads. "It still builds on our heritage -- a lot of the problems that we solve in business are the same problems that we solve at home."

The time is certainly right for EMC to seek out fresh revenue streams. EMC's profit dropped 17% year over year in its recent third-quarter results, although the company's revenue rose 13%, boosted by strong sales (subscription required) of storage outside the U.S.