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The computer storage industry develops magnetic, tape, and optical storage and retrieval devices for computer equipment. These products range from the common desktop computer floppy and hard disk drives to unique storage management systems such as advanced tape library and autoloader systems used in sizable enterprise networks.

The requirement for increased storage capacity and functionality has risen sharply, as microprocessors have grown faster, software applications require more computer resources , and network computing has become more prevalent. Attempts to tap into processing power and offer users greater functionality have made the typical new software application demand vastly more storage space than earlier versions. On personal computers, storage expectations have further changed and multiplied as a result of expanding multimedia features and content, like DVD movies and downloadable music on the Internet. In the mean time, corporate systems had to deal with escalating storage and processing needs from internal users, and additionally from the Internet.

Shipment values for computer storage gadgets and equipment like tape libraries, which totaled $9.0 billion in 2000, went down to $8.2 billion in 2001. At that point, some 66 companies competed in the domestic market. In spite of the myriad forces stimulating demand for storage devices, the industry, like many computer hardware segments, has been harmed by fierce price competition. Such pressures have brought essential consolidation within the industry and have introduced cost cutting at several storage device companies. In conjunction with increased price competition, the market for storage devices was prone to a weak economic climate in the early 2000s. This introduced challenges across virtually every product sub niche in the computer industry, as manufacturers encountered reduced spending and assurance levels in both the consumer and corporate sectors.

The computer storage industry continued to deal with both challenges and opportunities related to storage outsourcing services, or storage service providers, or SSPs, at the start of 2000s. These internet-based services offer storage space and management products that clientele can simply connect to and use, enabling companies to avoid buying and maintaining storage hardware and software themselves. At the start of 2000s, the new SSP field was altering how storage devices are employed and marketed. It also presented an opportunity for storage equipment manufacturers to branch into services. By 2001 telecommunication corporations like World Com and AT&T were taking part in this sector. Worldwide, IDC, a leading consultant in technology intelligence and industry analysis, forecast spending on SSPs to increase from $150 million in 2000 to $10.5 billion in 2005, as reported by Computing Canada. This increase reflected a compound annual growth rate of over 134 percent.

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