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IDC: Disk Storage Systems Sales Dip 3%

Though the data storage sector on the whole has often been praised as one of the few bright spots for its hardiness in a challenging economic environment, market research firm IDC said it doesn't expect an "imminent" recovery for the disk storage systems factory segment, whose sales were down this past quarter.

The disk storage niche posted sales of $4.7 billion in the third quarter of 2002, down 3 percent from the second quarter of 2002, according to IDC.

"The failure to gain revenue momentum in Q3 is yet another indication that a rebound in the disk storage systems market is not imminent," said Charlotte Rancourt, research director of IDC's Disk Storage Systems program. "The third quarter is consistent with an emerging trend whereby growth in gigabyte per unit does not offset the unrelenting decline in dollar per gigabyte."

The research firm said HP maintained its storage revenue leadership with 27 percent share. IBM is at No. 2 with 20 percent share. EMC maintained its king-of-the-hill position in the total network storage market (NAS combined with Open SAN) with 28 percent revenue share, but there were some leadership changes where those two segments bifurcate.

The NAS and SAN storage market declined more in revenue than the overall market, but strong competition reigned, as IDC said Network Appliance, who just this week inked a NAS gateway deal with Hitachi Data Systems, took the lead over EMC in the NAS storage market with 38 percent revenue share. Meanwhile, HP edged out EMC for the No. 1 position with 30 percent revenue share in the SAN storage arena.

John McArthur, group vice president of Storage Research at IDC, said the declining revenue does not reflect any malaise on the part of the networked storage field, which he has great confidence in, in terms of cost savings for customers and the ability for storage systems vendors to make money.

"The declining revenue picture can sometimes be misleading," McArthur said. "The trend towards networked storage continues, which means that suppliers have to look beyond revenue to see that capacity growth of networked storage exceeds the growth of direct-attached storage."