Fuelled by tighter data protection laws the worldwide storage software market grew to $2bn in the first quarter of 2005, up 14.9 per cent over the last quarter of 2004, according to new data from research firm IDC.

Storage software has been one of the strongest performers in the overall IT market as a result of increased interest in data protection and tighter legislation around data storage, explained Rhoda Phillips, research manager for IDC's Storage Software service.

"Spending growth related to data protection, including replication, back-up, and archive software, is an indicator of customers' continued concerns about application availability, data management and business continuity," she said.

The bulk of storage software investments, according to IDC, goes to storage resource management, software that gives IT management an overview of storage resources, centralised management of the system and the efficient back-up and recovery of data.

The analyst firm found that the second focus of storage software investment centres on back-up and archive software. The two categories each make up roughly one third of the total storage market.

IDC's research also showed a strong growth in software for storage replication, a tool that creates a second copy of a back-up for disaster recovery. Organisations also spent more on file system software for organising directories and files to make data quickly accessible.

There were few surprises in the market shares for software providers. EMC slightly increased its lead over number two Veritas, which last year was acquired by Symantec. The two largest storage vendors now hold 30 and 21.4 per cent of the market respectively, while showing growth of 29.3 and 22.1 per cent.

IBM held on to the number three spot (8.6 per cent) and Network Appliance surpassed HP for (6.7 and 6.6 per cent market share respectively).