External Disk Storage Systems Posts Sixth Consecutive Quarter of Year-Over-Year Growth, According to IDC

Business Wire, Dec 3, 2004

FRAMINGHAM, Mass. -- According to IDC Worldwide Quarterly Disk Storage Systems Tracker, worldwide external disk storage systems factory revenues grew 3.5% year over year to $3.4 billion in the third quarter of 2004 (3Q04), marking the sixth consecutive quarter of year-over-year revenue growth. Similarly, the total disk storage systems market continued to see positive overall trends, growing at 2.1% year over year, while storage capacity grew 50.5% year over year to 310 petabytes, achieving the largest growth rate posted over the last seven quarters.

"We are encouraged to see continued growth in disk storage systems, despite the lower rate when compared to previous quarters," said Brad Nisbet, program manager at IDC. "Conversely, we saw an increase in the growth of petabytes shipped, which is yielding the largest dollar per gigabyte pricing decline in seven quarters, and points to a growing share of higher-capacity, lower-cost disk drive deployments and a broader variety of products offered by the major vendors."

Total External Disk Storage Systems

EMC led the external disk storage systems market with 21.2% revenue share, driven by 17.4% year-over-year revenue growth for the quarter. HP, with a revenue decline of 7.5% year over year, came in second with 19.0% revenue share followed by IBM with 13.1% share. Network Appliance posted the strongest year-over-year revenue growth among the top vendors during the third quarter of 2004 with 24.6% growth, while EMC had the largest share point gains from the previous year, gaining 2.5 point of revenue share.

Networked Disk Storage Systems

The networked disk storage systems market (NAS combined with Open/iSCSI SAN) grew 17.1% year over year and surpassed the $2 billion mark for the second consecutive quarter. EMC continues to maintain its leadership in the total networked storage market with 28.9% revenue share, followed by HP and IBM with 23.3% and 11.5% revenue share respectively.

Similar to last quarter, the number 1 position in the Open/iSCSI SAN market continues to be hotly contested. HP and EMC were again locked in a statistical tie (with a 0.2 point share difference) for the top ranking in the market, which grew 17.8% year over year.

In the NAS market, which grew 14.3% year over year, Network Appliance led with 36.3% revenue share, followed by EMC with 34.8% share. Once again, HP posted the strongest year-over-year revenue growth among the vendors tracked by IDC, with 55.9% growth during third quarter of 2004.

The iSCSI SAN market again experienced sequential growth acceleration, posting nearly 44% revenue growth compared to the previous quarter. Network Appliance continues to lead the market with 43.1% share, followed by EMC with 22.1% share.

"Increased adoption of entry- and midrange networked storage (priced below $150,000 per system) drove the market for external disk storage systems up on an annual basis, compensating for a decline in high-end systems sales," says Natalya Yezhkova, senior research analyst, Storage Systems at IDC. "During the third quarter, the top vendors intensified their efforts to penetrate the midrange market through the introduction of new external storage systems and solutions targeted to specific customer and application segments. As a result of these efforts midrange networked storage posted both annual and sequential growth for the second consecutive quarter."

Top 5 Vendors, Worldwide External Disk Storage Systems Factory
Revenue, Third Quarter 2004

(Revenues are in Millions)

                       3Q04     Market     3Q03     Market    Revenue
       Vendor         Revenue   Share     Revenue   Share     Growth
                                                             3Q04/3Q03
----------------------------------------------------------------------

EMC                     $724      21.2%     $617     18.7%       17.4%
HP                      $647      19.0%     $699     21.2%       -7.5%
IBM                     $448      13.1%     $450     13.7%       -0.6%
Hitachi                 $289       8.5%     $296      9.0%       -2.3%
Dell                    $237       6.9%     $212      6.4%       11.9%
Others                $1,066      31.3%   $1,021     31.0%        4.4%

All Vendors           $3,410     100.0%   $3,295    100.0%        3.5%

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker,
December 2004

Total Disk Storage Systems Market - Internal plus External

In the total worldwide disk storage systems market, HP maintained its lead with 23.6% revenue share followed by IBM with 20.6% share. EMC maintained the third position with 14.5% revenue share. EMC and Dell posted the largest year-over-year revenue growth among the top 5 vendors during the quarter, with 17.4% and 11.3% points gained respectively.

Top 5 Vendors, Total Worldwide Disk Storage Systems Factory
Revenue, Third Quarter 2004

(Revenues are in Millions)

                        3Q04     Market    3Q03      Market   Revenue
       Vendor          Revenue   Share    Revenue    Share    Growth
                                                             3Q04/3Q03
----------------------------------------------------------------------

HP                     $1,180     23.6%   $1,262      25.8%     -6.5%
IBM                    $1,025     20.6%   $1,019      20.9%      0.5%
EMC                      $724     14.5%     $617      12.6%     17.4%
Dell                     $358      7.2%     $322       6.6%     11.3%
Hitachi                  $298      6.0%     $309       6.3%     -3.5%
Others                 $1,402     28.1%   $1,354      27.7%      3.6%

All Vendors            $4,988    100.0%   $4,883     100.0%      2.1%

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker,
December 2004