Storage users are buying more midrange and lower cost gear, which is slowing the overall revenue growth in this...
sector, according to International Data Corp.'s (IDC) quarterly worldwide disk storage systems report, released today.
While revenues grew 3.5% year over year to $3.4 billion in the third quarter of 2004, the growth was a little lower than previous quarters. But interestingly, terabyte growth is picking up. Storage capacity grew 50.5% year over year to 310 petabytes, achieving the largest growth rate posted over the last seven quarters, the report said.
"The midrange and lower segments, like ATA-based storage, are beginning to factor in. We don't track it yet, but we know it's growing as a mix," said Brad Nisbit, analyst with IDC. "There isn't a Clariion that goes out the door without an ATA shelf in it, and the same goes for the HDS Thunder array."
Winners and losers
EMC Corp. led the external disk storage systems market with $724 million, a 21.2% revenue share, driven by 17.4% year-over-year revenue growth for the quarter. Hewlett Packard Co., with a revenue decline of 7.5% year over year, at $647 million, came in second with 19% revenue share, followed by IBM with 13.1% share and $448 million in revenue. Network Appliance Inc. posted the strongest year-over-year revenue growth among the top vendors during the quarter with 24.6% growth, or $185 million, while EMC had the largest share point gains from the previous year, gaining 2.5 point of revenue share.
Although NetApp posted the strongest growth, this was the first quarter of flat growth for its NearStore product. "They may have exhausted their installed base -- it could be a sign that they need to branch out," Nisbit said.
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 No. 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.
NetApp leads NAS
In the NAS market, which grew 14.3% year over year, NetApp 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. "If anyone can make a go of the SMB and associated NAS market, it's HP. They've got the channel and the product," Nisbit said.
The iSCSI SAN market again experienced sequential growth acceleration, posting nearly 44% revenue growth compared to the previous quarter. NetApp continues to lead the market with 43.1% share, followed by EMC with 22.1% share.
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.