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Highest Year-Over-Year Growth in External Disk Storage Systems Market in Two Years, According to IDC

September 5, 2008

Worldwide external disk storage systems factory revenues posted 16.7% year-over-year growth totaling $5.1 billion in the second quarter of 2008 (2Q08), according to the IDC Worldwide Disk Storage Systems Quarterly Tracker. For the quarter, the total disk storage systems market grew to $6.9 billion in revenues, up 10.9% from the prior year’s second quarter. Total disk storage systems capacity shipped reach 1,777 petabytes, growing 43.7% year over year.

“Despite concerns about a 2008 slowdown in IT spending, external disk storage systems spending experienced strong growth in the first half of 2008,” said Natalya Yezhkova, research manager, Storage Systems at IDC. “The second quarter of the year was remarkable, not only because it is the highest growth in two years, but also because of the distribution of this growth across different market segments. The ability of vendors to meet a variety of needs among customers with a diversity of storage products and initiatives led to solid growth across all installation environments, even in those that declined over the past several quarters.”

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 21.7% revenue share in the second quarter, followed by IBM and HP in a statistical tie with 13.1% and 12.9% revenue share, respectively. Dell ended the quarter in the fourth position with 9.2% share. NetApp and Hitachi finished the quarter in a statistical tie for fifth with 8.0% and 7.6% revenue share respectively. Among the top 5 suppliers, EMC and NetApp posted the strongest year-over-year revenue growth during 2Q08, with 19.7% and 17.2% growth, respectively.

Network Disk Storage Systems

The total network disk storage market (NAS Combined with Open SAN) posted 22.0% year-over-year growth in the second quarter to more than $3.8 billion in revenues. EMC continues to maintain its leadership in the total network storage market with 26.4% revenue share, followed by HP with 12.9% revenue share.

In the Open SAN market, which grew 15.5% year over year, EMC lead with 23.9% revenue share, followed by HP with 16.7%. The NAS market grew 23.5% year over year, led by EMC with 39.8% revenue share and followed by NetApp with 28.5% share. The iSCSI SAN market continues to show strong momentum, posting 93.9% revenue growth compared to the prior year’s quarter. Dell, through its acquisition of EqualLogic, led the market with 32.8% revenue share, followed by NetApp and EMC in a statistical tie, with 14.6% and 14.1% share, respectively.

Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, Second Quarter of 2008

(Revenues are in Millions)

 Vendor             2Q08    2Q08     2Q07    2Q07   2Q08/2Q07 Revenue  Market  Revenue  Market   Revenue Share            Share   Growth ---------------------------------------------------------------------- 1. EMC                       $1,101   21.7%     $920   21.1%     19.7% 2. IBM                         $667   13.1%     $584   13.4%     14.3% 2. HP                          $655   12.9%     $605   13.9%      8.2% 4. Dell                        $469    9.2%     $405    9.3%     15.7% 5. NetApp                      $404    8.0%     $345    7.9%     17.2% 5. Hitachi                     $384    7.6%     $350    8.0%      9.8% Others                   $1,399   27.5%   $1,145   26.3%     22.2% All Vendors                  $5,080  100.0%   $4,353  100.0%     16.7% 

Source: IDC Worldwide Disk Storage Systems Quarterly Tracker, September 5, 2008

Note: Starting in Q1 2008, Dell is reported as the combined entity of Dell and EqualLogic.

Total Disk Storage Systems Market

In the total worldwide disk storage systems market, HP and IBM ended the quarter in a statistical tie for the number 1 position with 18.1% and 17.7% revenue share, respectively. EMC, Dell, and Sun Microsystems rounded out the top 5 with revenue shares of 15.9%, 10.0%, and 7.1% respectively.

Top 5 Vendors, Worldwide Total Disk Storage Systems Factory Revenue, Second Quarter of 2008

(Revenues are in Millions)

 Vendor              2Q08   Market   2Q07   Market 2Q08/2Q07 Revenue  Share  Revenue  Share   Revenue Growth ---------------------------------------------------------------------- 1. HP                          $1,254  18.1%   $1,270  20.3%     -1.2% 1. IBM                         $1,226  17.7%   $1,194  19.1%      2.6% 3. EMC                         $1,101  15.9%     $920  14.7%     19.7% 4. Dell                          $694  10.0%     $608   9.7%     14.2% 5. Sun Microsystems              $494   7.1%     $382   6.1%     29.2% Others                    $2,154  31.1%   $1,871  30.0%     15.2% All Vendors                    $6,923 100.0%   $6,244 100.0%     10.9% 

Source: IDC Worldwide Disk Storage Systems Quarterly Tracker, September 5, 2008

Note: Starting in Q1 2008, Dell is reported as the combined entity of Dell and EqualLogic.

Taxonomy Notes:

IDC defines a Disk Storage System as a set of storage elements, including controllers, cables, and (in some instances) host bus adapters, associated with three or more disks. A system may be located outside of or within a server cabinet and the average cost of the disk storage systems does not include infrastructure storage hardware (i.e. switches) and non-bundled storage software.

The information in this quantitative study is based on a branded view of the disk storage systems sale. Revenue associated with the products to the end user is attributed to the seller (brand) of the product, not the manufacturer. Original equipment manufacturer (OEM) sales are not included in this study. In this study, Hitachi Data Systems (HDS) sales do not reflect their OEM sales to Sun Microsystems and Hewlett-Packard.

IDC’s Worldwide Disk Storage Systems Quarterly Tracker is a quantitative tool for analyzing the global disk storage market on a quarterly basis. The Tracker includes quarterly shipments and revenues (both customer and factory), Terabytes, $/Gigabyte, Gigabyte/Unit, and Average Selling Value. Each criteria can be segmented by location, installation base, operating system, vendor, family, model, and region.

For more information about IDC’s Worldwide Disk Storage Systems Quarterly Tracker, please contact Hoang Nguyen at 508-935-4718 or hnguyen@idc.com.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 44 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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