Another Solid Quarter for Storage

Storage vendors had another strong showing in the third quarter, led by a resurgent EMC.

According to IDC, worldwide external disk storage systems factory revenue in the third quarter grew 9.9 percent from a year ago to $4.3 billion, the 14th consecutive quarter of year-over-year growth. The total disk storage systems market (both external and server-based storage) grew to $6.2 billion, up 7.9 percent from the year-ago quarter. Total disk storage systems capacity shipped reached 783 petabytes, growing 50.2 percent from the year-ago quarter.

“There was a marked increase in average size and selling price for disk storage systems in the third quarter, particularly for systems selling between $50,000 and $300,000,” stated Brad Nisbet, program manager with IDC’s storage systems program. “IDC believes these larger systems are being fueled by a variety of drivers, including the consolidation that results from increased server virtualization, branch office consolidation, and a new wave of organizations looking to store vast amounts of fixed content.”

EMC’s resurgence after a couple of weak quarters made it the fastest grower of the top five vendors, posting 18 percent growth and adding more than a point to its market share. IBM also had a solid quarter.

For the third quarter, EMC led the external disk storage systems market with a 21.4 percent revenue share, followed by HP with a 17.6 percent share and 1.8 percent growth. IBM maintained the third position with 13.7 percent market share and 14.3 percent growth, while Dell and Hitachi rounded out the top five in a statistical tie with 8 percent and 7.9 percent revenue share, respectively. Of the top 10, Network Appliance and NEC also posted strong growth (see table below).

The total network disk storage market (NAS combined with Open SAN) grew 17.2 percent year-over-year to more than $3 billion. EMC maintained its lead in the total network storage market with a 27.1 percent revenue share, followed by HP and IBM with 17.9 percent and 12.5 percent, respectively.

In the Open SAN market, which grew 17.3 percent year over year, EMC regained the top position with a 24.4 percent revenue share, followed by HP with 21 percent. The NAS market grew 16.7 percent year over year, led by EMC with a 38.1 percent share and followed by Network Appliance at 30.2 percent. The iSCSI SAN market continues to be red hot, posting 108.4 percent revenue growth from the prior year’s quarter. Network Appliance continues to lead the iSCSI market with a 21.5 percent share, followed by EMC with 16.9 percent.

“After a slowdown in growth during the first two quarters of 2006, the iSCSI SAN market returned to triple-digit year-over-year growth in the third quarter,” said Natalya Yezhkova, research manager in IDC’s storage systems program. “iSCSI continues to draw a great deal of attention among end users who are attracted to its ease of use and low TCO. IDC expects to see this adoption accelerate as vendors continue to increase their iSCSI product offerings over the next several quarters.”

In the total worldwide disk storage systems market, which includes both external and server-based storage, HP led the market with a 22.7 percent share, followed by IBM with 20.2 percent. EMC maintained the third position with 15 percent.

Top Vendors
Worldwide External Disk Storage Systems Factory Revenue, Third Quarter 2006

(Revenues are in millions)
VendorQ3 2006
Market shareQ3 2005
Market shareRevenue
HP $760 17.6% $746 19% 1.8%
IBM $591 13.7% $517 13.1% 14.3%
Dell $347 8% $322 8.2% 7.7%
Hitachi $340 7.9% $324 8.2% 5.1%
Network Appliance $268 6.2% $226 5.5% 18.9%
Sun Microsystems $209 4.8% $198 5% 5.4%
Fujitsu $93 2.2% $109 2.8% -14.7%
NEC $46 1.1% $36 0.9% 26.8%
Fujitsu Siemens $36 0.8% $30 0.8% 20.3%
Others $1,358 31.4% $1,239 31.5% 9.6%
All vendors $4,324 100% $3,934 100% 9.9%
Source: IDC, December 2006

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