EMC, iSCSI Show Strong Growth

EMC took over the leadership position from HP in the external storage systems market in the first quarter, according to IDC, but HP maintained its lead in
the total disk storage systems market.

Another surprise in IDC’s Worldwide Quarterly Disk Storage Systems Tracker for the first quarter was the emergence of iSCSI SANs, which posted 40% sequential growth.

Worldwide external disk storage systems (external to the application server) vendor revenue grew 6.5% year-over-year to $3.5 billion in the first quarter
of 2004, the third consecutive quarter of year-over-year growth, according to IDC. The total disk storage systems (both external and internal) market grew at a slightly slower rate of 3.5% year-over-year. Storage capacity continues to outpace revenue growth, growing 39.5% year-over-year to 247 petabytes shipped during the quarter, IDC said.

John McArthur, group vice president at IDC, reports that the North American market “is the bright spot, delivering four consecutive quarters of real growth. The weak dollar continues to be largely responsible for perceived growth in other major regions, however, and Western Europe is particularly
challenging, with factory revenue flat to slightly down, even with the weakened dollar.”

EMC took the leadership position from HP in the external disk storage systems market, with 26% year-over-year revenue growth for a 20.2% revenue market share in the first quarter. HP came in second with 18% revenue share, followed by IBM with 12% share. Network Appliance and Dell also posted strong year-over-year revenue growth, with 22.3% and 21.5% growth, respectively.

External RAID continues to account for more than 90% of the external disk storage systems market, growing 8.9% year-over-year, according to IDC. EMC led the external RAID market with 22% revenue share, followed by HP with 16.9% share.

The networked disk storage systems market (NAS combined with open and iSCSI SANs) posted 17.5% year-over-year growth to more than $1.9 billion, largely
due to strong absolute dollar growth in the open SAN market, IDC said. EMC held onto the top spot in the total networked storage market with 28.5% revenue share, followed by HP with 22.8% and IBM with 10.5%.

In the open SAN (non-mainframe SANs, both Fibre Channel and iSCSI) market, which grew 16.5% year-over-year, EMC moved into a statistical tie with HP for the top spot, with HP at 27% revenue share and EMC at 26.8%. In the NAS market, Network Appliance moved into a statistical tie with EMC for the top position. Network Appliance and EMC had 35.1% and 34.6% share, respectively.

iSCSI Comes On Strong

The iSCSI SAN market posted greater than 40% quarter-over-quarter revenue growth, although it is still less than 1% of the networked disk storage systems market. Network Appliance led the market with 48.4% share, followed by EMC with 27.7% share.

“The migration from internal direct-attached to external networked storage continues, representing increased opportunity for storage systems suppliers,” states Brad Nisbet, program manager at IDC. “Customers across all price segments of the market are looking to consolidate and simplify their infrastructure through networked storage.”

In the total worldwide disk storage systems market, HP maintained its lead with 23.2% revenue share, followed by IBM with 19.7% share. EMC maintained the third position with 13.9% revenue share. EMC and IBM posted the largest share gain year-over-year among the top vendors during the first quarter, with 2.5 and 1.4 points gain, respectively.

Gartner Also Puts EMC On Top

Gartner Dataquest also put EMC in the top spot in its first quarter estimate of worldwide intelligent external controller-based disk storage vendor revenue market share.

EMC garnered a 23.6% market share, with revenues up 22% year-over-year, but down 4.2% sequentially from the fourth quarter.

HP posted a 17% market share, with revenues up just 0.2% year-over-year and down 24.8% sequentially from the fourth quarter.

IBM also slipped in the Gartner report, with revenues down 0.3% year-over-year and 44.6% sequentially, to a 10.4% market share.

Hitachi saw an increase to a 9.8% market share, thanks to a 5.4% sequential revenue gain from the fourth quarter, while Sun saw its market share slip
from 6.8% to 6.5%.

Dell, Network Appliance, and StorageTek each gained market share, to 5.5%, 5.4%, and 1.3%, respectively.

Of note, Gartner’s external storage systems data focuses on controller-based systems over host-based systems, leaving JBODs (Just a Bunch of Disks) out of its results.

“Host-based external disk storage (i.e. JBOD) is a rapidly declining market,” states Roger Cox, Research Vice President, Gartner. “[Our] view is that the only market that really counts to the end user and financial communities is the external controller-based disk storage market.”

Gartner estimates the total external controller-based disk storage market at $3.1 billion.

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