If you are following the storage business, you may have come across the news of a record-breaking 148.3 Exabyte of compressed capacity sold in LTO tapes this year, which is slightly higher compared to last year. You might also be aware of the less impressive sales numbers for hard drives. So what does all of this mean for the storage industry?
First, let's analyze the data provided by the controllers of the LTO consortium and combine it with our own statistics from LTO Dubai. In the UAE, the majority of installed drives are LTO-6, accounting for approximately 45% of the shipped tapes. Following that, LTO-7 holds a 25% market share. Together, these two generations dominate 70% of the market currently. LTO-6 users will inevitably need to transition to newer generations as prices for LTO-6 tapes rise and the cost per TB becomes less attractive compared to LTO-8. However, it's possible that LTO-6 users might skip LTO-8 due to its lack of compatibility with LTO-6. LTO-8 was the first drive to break the backward compatibility rule of supporting the two previous generations in order to accommodate the LTO-7 Type M. Therefore, it is our speculation that LTO-6 numbers will gradually shift towards LTO-9. Nonetheless, as of today, LTO-6 remains the top-selling tape in the Middle East. In Europe, the distribution of LTO-6 and LTO-8 might differ, but for the purpose of our analysis, we will assume the mix of LTO tape we have in Dubai UAE
| UAE Percent Weightge | Compressed Capacity (TB) | Number of Tapes Sold | |
| LTO-5 | 10 | 3 | 4,943,333 |
| LTO-6 | 45 | 6.25 | 10,677,600 |
| LTO-7 | 25 | 15 | 2,471,667 |
| LTO-8 | 15 | 30 | 741,500 |
| LTO-9 | 5 | 45 | 164,778 |
As the tabel shows, Last year an estimate of 10 million LTO-6 tapes were likely shipped. However, as the transition from LTO-6 to LTO-9 occurs, the number of tapes is expected to decrease due to the higher capacity of LTO-9, allowing more data to fit into a smaller quantity of tapes.
Regarding the future predictions for tapes, we anticipate the following:
1. The LTO tape business is projected to maintain its strength, with branded tapes from HPE, IBM, and Quantum continuing to dominate the market. Although Fuji serves as the OEM, Quantum likely has higher volumes than Fuji-branded tapes currently. Spectralogic-branded tapes could gain an advantage with LTO-9 since they are currently the sole vendors shipping pre-calibrated LTO-9 tapes. It would not be surprising if Spectra replaces Quantum as the third-largest player in the LTO-9 market.
2. The incremental additional demand for LTO business is primarily driven by the necessity for a ransomware-proof backup solution. LTO tapes offer higher reliability, lower power consumption, and the lowest cost per TB, making them highly desirable for long-term archival purposes. Large enterprises have traditionally used LTO tapes as their ultimate storage medium, but smaller businesses seeking protection against ransomware attacks are also turning to tapes.
3. There exists a substantial market of media professionals who currently do not utilize LTO tapes. This is primarily because LTO drives from major vendors only come with SAS connectivity, whereas media professionals commonly employ Thunderbolt 3. However, there are vendors like Symply and mlogic who produce drives with Thunderbolt 3 interfaces, and ATTO offers SAS to Thunderbolt 3 bridges that facilitate the connection of SAS drives to a Thunderbolt 3 port. Despite the slow adoption thus far, it is anticipated that the adoption of LTO tapes among media professionals will increase in the future. The media industry generates an enormous amount of content that requires storage, and as the adoption of LTO tapes increases, the numbers can potentially reach staggering heights.
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