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External Disk Storage Systems Growth Continues on the Strength of Network Storage Systems, IDC Finds

Posted on: Friday, 2 September 2005, 00:00 CDT

According to IDC's Worldwide Disk Storage Systems Tracker, factory revenue in the external disk storage systems market grew 8.6% year over year to $3.8 billion in the second quarter of 2005. The total worldwide disk storage systems market grew at a slightly higher year-over-year rate of 9.9% to $5.6 billion in the second quarter of 2005, marking the highest year-over-year growth in the last 8 quarters. Capacity continues to outpace overall revenue growth with total disk storage systems petabytes growing 59.3% year over year to 457 petabytes for the second quarter.

"The high growth for external systems represents continued investment in networked storage, while the growth in internal storage indicates richer configurations and increased sales of servers with 3 or more hard disk drives," said Brad Nisbet, program manager in IDC's Storage Systems program. "Storage continues to be an area filled with opportunity as many organizations become increasingly dependent upon the value of their business information."

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 21.2% revenue share, followed by HP and IBM with 18.8% and 13.8% revenue share, respectively. Dell edged out Hitachi for the fourth position with 8.3% revenue share while Hitachi ended the quarter with 7.3%. Three of the top 5 vendors had double-digit growth during the second quarter with Dell leading the way with 27.1% year-over-year growth followed by HP and IBM, each with more than 13% year-over-year growth. HP's strong year-over-year performance was due in part to an easy comparison, with an unusually weak second quarter in 2004.

"The top five vendors accounted for almost 70% of the external disk storage systems market - up from 68% a year ago, confirming the maturity of the market," said Natalya Yezhkova, senior research analyst, IDC Storage Systems. "Four of the top five vendors gained market share benefiting from the success of their midrange products."

Network Disk Storage Systems

The total network storage market (NAS combined with Open and iSCSI SAN) posted 16.1% year-over-year growth in the second quarter to nearly $2.5 billion. EMC continues to maintain its leadership in the total network storage market with 27.9% revenue share, followed by HP with 21.3%. Dell and IBM posted the strongest year-over-year revenue growth for the quarter among the top 5 vendors, with 33.2% and 22.9% growth, respectively.

The Open/iSCSI SAN market grew 17.8% year over year, surpassing $2.0 billion in revenues for the first time. Unlike the first quarter of 2005, there was no clear leader: EMC and HP were in a statistical tie for the first place position. EMC had 25.0% revenue share and HP had 24.8% revenue share for the second quarter. Dell and IBM posted the strongest revenue share gain among the top 5 vendors, with 1.6 and 0.6 year-over-year share point gain, respectively.

In the NAS market, which grew 9.5% year over year, EMC led with 40.2% revenue share, followed by Network Appliance with 35.2% share. The iSCSI SAN market posted nearly 140% revenue growth year-over-year. Network Appliance continues to lead the market with 41.6% share, followed by EMC with 26.0% share. Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, Second Quarter 2005 (Revenues are in Millions) Q2 2005 Market Q2 2004 Market Revenue Growth Vendor Revenue Share Revenue Share 2Q05/2Q04 -------------------------------------------------------------------- EMC $807 21.2% $736 21.0% 9.6% HP $717 18.8% $631 18.0% 13.7% IBM $527 13.8% $465 13.2% 13.4% Dell $315 8.3% $248 7.1% 27.1% Hitachi $278 7.3% $281 8.0% -1.1% Others $1,169 30.7% $1,151 32.8% 1.6% All Vendors $3,813 100.0% $3,512 100.0% 8.6% Source: IDC, September 2, 2005

Total Disk Storage Systems Market - Internal plus External

In the total worldwide disk storage systems market, HP maintained its lead with 23.5% revenue share followed by IBM with 20.5% share. EMC maintained the third position with 14.4% revenue share. Similar to the external disk storage systems market, three of the top 5 vendors (Dell, HP, and IBM) outperformed the market in the second quarter. Top 5 Vendors, Worldwide Total Disk Storage Systems Factory Revenue, Second Quarter 2005 (Revenues are in Millions) Q2 2005 Market Q2 2004 Market Revenue Growth Vendor Revenue Share Revenue Share 2Q05/2Q04 ---------------------------------------------------------------------- HP $1,313 23.5% $1,152 22.6% 13.9% IBM $1,146 20.5% $1,013 19.9% 13.2% EMC $807 14.4% $736 14.5% 9.6% Dell $463 8.3% $365 7.2% 26.7% Sun Microsystems $339 6.1% $378 7.4% -10.4% Others $1,529 27.3% $1,445 28.4% 5.8% All Vendors $5,596 100.0% $5,090 100.0% 9.9% Source: IDC, September 2, 2005

Taxonomy Notes:

IDC defines a Disk Storage System as a set of storage elements, including controllers, cables, and 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 market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com

All product and company names may be trademarks or registered trademarks of their respective holders.

Source: Business Wire

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