Hitachi data storage sees U-shaped recovery in Asia

By Doug Young

HONG KONG (BestGrowthStock) – Corporate technology spending in Asia has begun to bounce back following the global recession, but buyers are still cautious and recovery will likely be slow, the head of Hitachi’s data storage division said.

“We see IT spending continuing to recover, but slowly,” Kevin Eggleston, Asia-Pacific head of Hitachi Data Systems (HDS), one of the world’s top five makers of data storage equipment, told Reuters in an interview late on Friday.

“We’re clearly seeing a U-shaped recovery on the IT side, not a V-shaped one,” he said, adding that most major companies were still cautious about technology spending.

Hitachi Data Systems competes with the likes of EMC Corp, Hewlett-Packard and IBM in making the systems companies use to store the massive amounts of data they generate.

In the cautious climate following the worst recession since the 1930s, technology buyers were increasingly looking to companies like HDS to set up and manage data storage systems and then lease those services on an outsourced basis, Eggleston said.

“We’re seeing much more demand for that,” he said. “This crisis and the budget pressures it created caused chief technology officers to do creative things.”

Outsourcing, while not always cheaper in the long run, can allow companies to avoid the risk of big upfront costs.

China, which is growing faster than other major economies, was leading the region in the fledgling technology spending rebound, with the country’s data storage market set to grow 9-10 percent this year, Eggleston said.

He predicted his company would outperform that rate, with percentage growth likely in the teens.

China’s data storage market has grown from virtually nothing to become HDS’s second-largest Asian market, excluding Japan, behind Australia/New Zealand, since the company entered the market early this decade, Eggleston said.

“China is a $750 million market for data storage,” he said. “We’re roughly a $100 million company in China. It’s our fastest growing (major) market … We see China overtaking Australia/New Zealand in the next two to three years.”

Asia, excluding Japan, accounts for about $400 million of HDS’s $3 billion in annual sales.

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Hitachi data storage sees U-shaped recovery in Asia