Hewlett Packard Co. has lost market share in storage services in the Americas region, slipping to No. 3 behind IBM and EMC Corp., according to a report published today by Gartner Dataquest Inc.
In 2002, Gartner said, "HP should fortify a strong second place when it consolidates storage services revenue from Compaq in subsequent reporting periods." Instead, HP has fallen behind IBM and EMC in the Americas, which includes the United States, Canada and Latin America.
Thomas Goepel, worldwide portfolio manager for storage services at HP, told SearchStorage.com that the company has maintained its position worldwide, although is "not outperforming the market." He said that Gartner's estimates are "roughly right" but noted that HP does not break out the storage services revenue it gets from outsourcing contracts. For example, recent Proctor and Gamble and CIBC World Markets outsourcing deals included storage services, but these are not represented in the report.
The revenue numbers are interesting nonetheless. In 2002, Gartner said Compaq reported $906 million in services revenue while HP reported $1.02 billion. In 2003, the combined company reported storage services revenue of $1.05 billion, less than the two companies' right after the merger. Goepel said this is because Compaq included outsourcing revenue as part of its total number.
In EMEA (Europe, Middle East and Africa) and Asia Pacific, HP held onto its No. 2 spot, which means it tied with EMC for worldwide market share overall, with both companies at 6%. EMC dropped to third place in Asia Pacific and fourth place in EMEA. IBM dominates the sector with 21% market share.
In 2002, IBM reported storage services revenue of $4 billion, which grew to $4.7 billion in 2003, according to Gartner. EMC had services revenues of $972 million in 2002 and $1.249 billion last year.
Gartner notes that if large outsourcing and IT firms were taken into account, the ranking would have been very different. For example, the firm estimates that EDS storage services revenue topped $2.3 billion in 2003, followed by Computer Sciences Corp. with estimated storage services revenue of more than $1.5 billion. "This would have had a profound impact on vendor revenue rankings if these vendors were included," said Adam Couture, analyst and author of the report.
In 2002, Gartner reported that the storage services market was worth about $21 billion. It grew modestly in 2003, according to Couture, and depending on worldwide economic conditions, could top $30 billion by 2007 he said.
The report states that most new service initiatives in 2004 will be centered around information lifecycle management, new monitoring and managed services and revamped storage-on-demand offerings. The bad news for users, according to Couture, is that all of these services tend to place infrastructure decisions "firmly in the hands of a single storage provider". However, he said that not even IBM will be able to provide everything, leaving room for smaller players to fill the gaps.