RealTime IT News

Storage Software Vendors Take Their Lumps in 2Q

Worldwide storage software spending declined almost 10 percent in the second quarter this year, taking a bite out of the expected annual revenue haul for leading vendors such as IBM, EMC, Symantec and CA.  

Total storage software sales for the second quarter fell to $2.84 billion, down from $3.15 billion in the same three-month period in 2008. And four of the top five storage software makers lost market share in the quarter, according to market researcher IDC's Worldwide Quarterly Storage Software Tracker report.  

"The storage software market is slowly starting to recover with positive growth over the first quarter of 2009," said IDC analyst Michael Margossian in a statement. "While only two out of the top five vendors experienced growth over the previous quarter, the replication market grew 5 percent compared to 1Q09 led by NetApp, which has been refocusing its efforts and grew 20 percent from the previous quarter."  

NetApp (NASDAQ: NTAP), the fourth-largest storage software vendor, managed to eke out a slight improvement in total sales in the quarter ($241 million vs. $239 million) and improved its overall market share to 8.5 percent from 7.6 percent in the second quarter of 2008.  

Last month, NetApp became the first data storage vendor to offer native Fibre Channel over Ethernet (FCoE) connectivity in its storage systems, giving Fibre Channel users the ability to build out Ethernet infrastructures while preserving their Fibre Channel investments.  

EMC (NYSE: EMC), the world's largest storage software provider, saw its second-quarter sales tumble 14.4 percent, falling from $745 million to $638. Its total market share also slid from 23.6 percent to 22.4 percent. In January, the company lopped off 2,400 jobs in a cost-cutting move.  

It was a similar story for the remainder of the storage software Top 5.  

No. 2 Symantec (NASDAQ: SYMC) saw its sales dip from $590 million to $524 million while No. 3 IBM and No. 5 CA reported sales declines of 18.5 percent and 14.2 percent, respectively, in the quarter.  

The top five vendors in the storage software market accounted for 68.8 percent of all sales, down from 71.6 percent in the year-ago quarter.