The disk storage industry defied economic gloom in the second quarter with strong increases in both capacity sold and revenue, according to two research companies.

Worldwide revenue from external disk storage systems grew 16.7 percent in the quarter, the fastest year-over-year increase that market has seen in two years, IDC said on Friday. Meanwhile, total disk storage systems revenue grew 10.9 percent, according to IDC. Vendors shipped 1,777 petabytes of capacity in total, up 43.7 percent from a year earlier.

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Sales growth was remarkable especially because it occurred across several market segments, IDC said in a news release.

Despite economic slowdowns in some parts of the world, storage demand has been growing rapidly, driven in part by increased use of video and by regulations that force enterprises to preserve more data. IDC has estimated overall demand for storage capacity is growing by about 60 percent per year.

IDC defines a disk storage system as a set of storage elements associated with three or more disks. Some are located inside server cabinets and some are external. While the total disk storage system market hit $6.9 billion in revenue in the second quarter, the external market grew to $5.08 billion.

EMC kept its lead in external disk storage systems with 21.7 percent of the market, followed by IBM and Hewlett-Packard in a statistical tie with 13.1 percent and 12.9 percent, respectively. EMC's revenue grew fastest among the major vendors, up 19.7 percent to $1.101 billion from $920 billion a year earlier. HP's growth rate was lowest, at 8.2 percent, and the company lost a full percentage point in market share.

In the total disk storage systems market, HP fared even worse with a 1.2 percent drop in revenue, while all other major vendors gained. Though HP remained in the lead, it fell to an 18.1 percent market share, nearly tied with IBM at 17.7 percent. EMC was in third place and Dell in fourth. Sun Microsystems had the strongest rise in revenue, at 29.2 percent. Its revenue grew to $494 million and its market share to 7.1 percent.

According to figures from research company Gartner, the external controller-based disk storage market grew 18.8 percent in the second quarter, reaching $4.46 billion in revenue. EMC lost half a percentage point of market share but maintained a commanding lead at 24.3 percent, experiencing 16 percent revenue growth in the quarter. Next was IBM with 14.1 percent of the market, followed by HP, Dell, and Hitachi Data Systems. NetApp came in sixth but had a strong 22.9 percent revenue gain, Gartner said.

Sun's revenue shot up 34.7 percent in the quarter, according to Gartner, which attributed the gain to its StorageTek 2000-, 6000-, and 9000-series products. The relative newcomer to storage, which entered the market through StorageTek and other acquisitions, had 6.6 percent of the market.

Gartner found the Japanese market leading in growth, with revenue up 38.7 percent from a year earlier, followed by Latin America with 25.2 percent. Europe, the Middle East and Africa had growth of 22.3 percent, and the Asia-Pacific region grew 16.6 percent. North America trailed all other regions with 12.7 percent growth, according to Gartner.

Microsoft Friday renamed the next major release of BizTalk server and committed to releasing major updates to the business process management server line ever two years or less.

Burley Kawasaki, director of product management in Microsoft's connected systems division, said the company changed the name of the name of the next version from BizTalk Server 2006 R3 to BizTalk Server 2009 to indicate that its a major release. The new version is slated to ship during the first half of next year, he added.

[ Discover the top-rated IT products as rated by the InfoWorld Test Center. ]

BizTalk Server 2006 R2 was made generally available last September.

"[Users] want more transparency," Kawasaki said. "As they're doing more and more with our technology, they want to be able to plan for future releases. We're trying to provide much more transparency about where we're going with BizTalk."

Kawasaki went on to outline the major new features planned for the 2009 release and for the follow-on major release, now referred to as BizTalk Server 7.

The 2009 release, he said, will add support for Windows Server 2008, Visual Studio 2008 SP1, SQL Server 2008, and the .Net Framework 3.5 SP1 as well as bolstered connectivity and better developer productivity tools.

On the connectivity front, the server will include a new Web services registry, new business adapters, better host systems integration, and enhanced business activity monitoring, Microsoft said. It will also include improved support for EDI and AS2 protocols for business-to-business connectivity, Kawasaki added.

For developers, BizTalk 2009 adds support for Microsoft's Team Foundation Server and provides development teams with integrated source control, bug tracking, Project Server integration, and support for team development.

Microsoft plans to focus on developer productivity and visibility in BizTalk Server 7, Kawasaki added. For example, Microsoft hopes to provide an easier way to do automated mapping between systems and protocols to speed connectivity. Release 7 will also focus on asset management to support remote devices beyond RFID readers, he added.

Computerworld is an InfoWorld affiliate.

Google garnered headlines all week with its new Chrome browser. Rival Microsoft announced it will release just four patches next Tuesday, but that may not be cause to think the day will be an easy one for those responsible for keeping systems patched. On the virtualization front, HP launched a product-and-services blitz this week, while VMware picked up a Microsoft certification. Otherwise, a warning was issued about new trickery from spammers, and in case we all weren't aware of it by now, social-networking sites could be ripe for malware.

1. Continuing coverage: Google's Chrome browser: Google offered up a Labor Day holiday surprise when it inadvertently posted a look at its new Chrome browser at an unofficial company blog. Google then made the news official later in the day and released the browser, which shifts the landscape of that market, in beta on Tuesday. Reviewers found the Chrome browser fast, functional, and, following the Google home-page pattern, with a stripped-down look. By week's end, though, the first security problems had surfaced.

2. Upcoming Microsoft patch lineup could be 'massive,' says researcher: A word of warning for next week -- don't assume that because Microsoft is releasing only four patches this month that it will be a snap to deal with them. "It's not going to be an easy month, what with all these different applications and different operating systems affected. Patching will be a lot more involved than you'd think with just four bulletins," said Andrew Storms, director of security operations at nCircle Network Security. The job of applying the patches could be "potentially massive," he said.

3. Researchers build malicious Facebook application: A research team built a malicious Facebook program to show the perils of social-networking applications. Their experiment shows how easy it could be for a miscreant to trick a big group of users into downloading an application that seems harmless, but that contains malicious code.

4. Should IT form a union?: Demands on IT workers keep piling up, and they have to labor under the constant threat of having their jobs outsourced. Is it time for IT workers to unionize in order to demand better working conditions? Perhaps, but the idea could also be a tough sell in the "lone gunman" ethos of IT work.

5. Sony recalls 73,000 Vaio laptops due to burn hazard: Sony recalled 73,000 Vaio TZ laptops because a manufacturing defect could cause them to overheat in some circumstances. Wiring near the hinge of the computer models could short circuit, Sony said. One person has suffered a minor burn and Sony has gotten 15 additional reports about computers overheating.

6. Spammers use free Web services to shield links: Spammers are using free Web services to try to make the spam links they send out look more legitimate, according to MessageLabs. Photo-hosting sites and the like are being used by spammers who are taking advantages of various features offered as part of free services, the e-mail security vendor has found.

7. HP launches product blitz for virtualization: Responding to survey findings that show most businesses aren't making the most of what virtualization has to offer, HP introduced several new products aimed at both desktop and server virtualization. Besides the hardware, including a new ProLiant server and desktop thin clients, HP is alos offering virtualization consulting services.

8. VMware's ESX certified for Microsoft support, deployment: Microsoft's Server Virtualization Validation Program has issued its first certification with VMware's ESX hypervisor receiving the honors. The certification means that VMware's product will work with Microsoft's Windows Server and other software. It also means that ESX users will be able to receive tech support from both companies.

9. Internet traffic growth slowing, research firm shows: Remember the alarming reports that the Internet is going to collapse under the weight of its own data, especially as more video goes online? Well ... for the second year in a row, international Internet capacity grew at a quicker pace than Internet traffic, according to TeleGeography. International Internet traffic grew 53 percent from the middle of last year to the middle of this year, compared to 61 percent in the prior year. Between 2007 and 2008, average traffic utilization levels on the Internet dropped to 29 percent from 31 percent, with peak utilization decreasing from 44 percent to 43 percent, the market-tracking firm found.

10. Cheaters: Inside the hidden world of IT certification fraud: A group of IT hardware and software vendors have joined with independent certifying agencies, test centers and some others to create the IT Certification Council in an effort to share information to keep certification fraud from occurring. Certification cheating is apparently a dirty little IT secret that the council seeks to bring into the open.

Can a business be run solely in the cloud without a server anywhere in sight? Appirio says it can and is already doing it.

Starting out with four people two years ago and growing to nearly 100 employees, the company relies on cloud-based, on-demand software from Google and Salesforce.com, said Narinder Singh, founder and chief marketing officer at Appirio. The company provides products and services to accelerate adoption of on-demand services.

"Today, our company continues to run its entire business in the cloud. There's no servers inside Appirio," Singh said during a presentation at the Office 2.0 conference in San Francisco on Thursday afternoon.

The company uses Google Docs to collaborate on a day-to-day basis and Salesforce.com for such tasks as an employee recruitment system. Human resources, IT asset management, and financial systems also run in the cloud. Google Sites, providing secure Web sites, is used for collaborating with customers.

Annual IT costs per employee for hardware and software at Appirio are less than $1,000, as opposed to the $6,000 to $12,000 per employee that was spent at SAP when Singh worked there, he stressed. With cloud-based computing, large and small companies have access to the same infrastructure, Singh said. The core infrastructure will scale as Appirio grows, he said.

"We even manage the subscription process of how we actually look at licensing our customers inside of Salesforce," Singh said.

While acknowledging the risks that Google's applications and Salesforce.com are not immune to system failures, Singh nonetheless stressed the high uptime rates, estimating that Salesforce.com is has better than a 99.9 percent uptime rate. Appirio expects these uptimes to increase, he said. Appirio had pondered building redundant systems for some customers and process areas but has not acquired this capability, Singh said.

Appirio at the conference introduced Premium and Personal editions of its Sync tools intended to make individuals more productive. These tools provide synchronization for Google and Salesforce.com so users can more easily connect to their day-to-day productivity tools, the company said.

The company also now offers a package service to help prototype business models using on-demand platforms. The Business Model Prototyping service is based on a four-to-eight week engagement for executives at large and mid-sized businesses.

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Bob Rice is the author of Three Moves Ahead: What Chess Can Teach You About Business, and the former C.E.O. of a tech startup. He now runs merchant bank Tangent Capital, which he founded in 2005.

Love 'em to death, but here's the thing to remember about Google: Your business is its business.

Google doesn't sell software or hardware or content. It sells you -- or, slightly more precisely, its ability to understand your habits and deliver your attention to particular advertisers. And because of this, I am just a touch nervous about installing Chrome, its new browser software.

Of course, Google already collects mountains of information about you from your searches (you do realize they keep track of those, right?), and from the huge cookie collection delivered fresh daily by their ad bakery (the cookie gathers information from all Google products and affiliates -- and doesn't expire until 2038). Gmail users may also have long ago realized they were conceding privacy for convenience and bells and whistles.

Indeed, Google has far more and better data about your habits than the relatively modest amounts that set of privacy firestorms for AOL and DoubleClick (which Google now owns) back in the day. But so far, with Google, it's been like successfully boiling a frog: the temperature has gone up very slowly, so nobody's jumped out of the pot just yet.

Perhaps that's because Google offers so many wonderful services. Who wants to head out without checking the traffic with Google Maps (oops, more footprints)? Or plan an event without checking everybody's calendar (oy...)?

At first glance, Chrome seems just another browser -- and between us, who cares? IE, Safari, Firefox, Chrome -- one has more cup-holders, another has leather trim. So is the idea really just to take a piece of the "browser business," as many say? I doubt it, largely because there isn't one: Nobody's paid for browser software since about 1998. Firefox, remember, is the product of a nonprofit -- one that, interestingly, has been heavily funded by Google, for reasons previously unknown.

At first, Google's goal will be to change the software game and speed your transition from a desktop-driven environment to its "cloud computing" applications: word processing, spreadsheet, and presentation software. Google hopes that soon, you'll create these documents on one computer, leave them on their servers in the sky, and then continue working on them later from any other computer. Natch, you'll collaborate, share and deliver the docs this way, too. And Chrome will be the interface for it all, on top of serving more mundane web surfing functions.

And all the while, Google will be doing the usual, capturing your data, your documents, your habits.

And, how will they use all this information? To do what they do: deliver ever more precisely targeted ads, with concomitant higher response rates, and thus generate more dollars. Maybe we'll see "This cell sponsored by Fidelity" in our spreadsheets soon.

Sure, other companies are in position to track your data, too. The difference is that, for the most part, their business models don't require them to exploit that knowledge. And certainly nobody has the reach that Google has and will have -- especially after they eliminate your last ability to hide with the G-phone this fall.

Now we know Big Brother's real name, do we care? Free software and services are great, and I'd rather see relevant ads than irrelevant ones. But make no mistake: this lunch, too, has a real cost. It's called privacy.

So that's the question consumers have to answer: Is it worth it? If they genuinely don't care about one company controlling a complete catalog of their surfing and working, talking and texting, and meetings and greetings, fine. For me, I think I'd rather pay cash and avoid a virtual peeping Tom who only makes money if he predicts my private behavior well. But, then, I admit it: I'm so 2005.

So, shine up your computer with Chrome if you like; but at least consider getting that "Do No Evil" promise in writing first.

Dell's new netbook, the Inspiron Mini 9, will be sold with built-in mobile broadband by Vodafone, the companies announced on Thursday. The deal is part of a growing trend, as operators try to find new growth opportunities.

Dell's entry in the growing netbook space weighs in at just over 1 kilogram, and has an 8.9-inch LED display. Like some of its competitors it has an SSD (solid-state disk) for storage, holding up to 16GB.

[ For more on products in the hot mini-notebook category, check out our hands-on looks at Asus' Eee PC 901 and 1000, the Cloudbook Max netbook, Elitegroup's G10IL mini-laptop, MSI's Wind low-cost laptop, Giga-byte's M912X mini-laptop, HP's Mini-Note netbook, and Acer's Aspire one. ]

The Vodafone version of the netbook supports download speeds up to 7.2Mbps and upload speeds up to 2Mbps, using HSDPA (High-Speed Downlink Packet Access) and HSUPA (High-Speed Uplink Packet Access), according to company spokesman Ben Taylor. The Mini 9 also comes equipped with support for Wi-Fi.

Vodafone will start selling the Mini 9 later this month, but has not yet said in which countries it will offer the netbook. For now its "in key European markets," the operator said.

Vodafone will announce pricing later, but if you just want the netbook, it sells elsewhere for from £299 ($526) in the United Kingdom. A version with Ubuntu's version of the Linux operating system, with a user interface customized by Dell, will also go on sale with a starting price of £269. Vodafone isn't announcing which operating system it has picked, or if both will be available, according to Taylor.

Vodafone is far from alone in its interest in the laptop market. In just the last couple of weeks Orange, Telenor, and TeliaSonera have also announced similar plans.

As growth has flattened in areas including voice, SMS (Short Message Service), and roaming, operators have been forced to look elsewhere, and the addition of laptops to their offerings is a no-brainer, according to Shaun Collins, managing director at CCS Insight. "For the operator it's all additional business, there are for example no interconnect costs it has to share with others," said Collins, who thinks that next year laptops will grow to be as important to operators as mobile phones.

But it's not just the operators who have learned to value laptops. Laptop manufacturers have also realized that the mobile broadband market is a growth opportunity for them as well, and are more open to making deals, according to Collins.

The market is still in its infancy, and for the next couple of years there will be a land-grab, as operators fight over the customer base, according to Collins. "Then we'll start to see some differentiation," said Collins, as operators start to take advantage of the open nature of PCs, and add software to guide users to their own offerings.