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IDC: Q1 HPE storage sales soared, rivals tanked

Hewlett Packard Enterprise (HPE) bucked the trend of storage revenue declines in the first quarter of 2016, according to IDC’s quarter enterprise storage systems tracker. HPE was the only member of the top six vendors to increase its storage revenue over the first quarter of the previous year.

Industry-wide total external storage (SAN and NAS) declined 3.7 percent to $5.4 billion for the quarter. Overall storage, including servers and server-based storage, declined seven percent to $8.2 billion.

HPE’s external storage revenue increased 4.6 percent to $535.7 million, ranking third behind EMC and NetApp. HPE increased market share from 9.1 percent in the first quarter of 2015 to 9.9 percent in the first quarter of 2016.

EMC revenue declined 11.8% to $1.349 billion as it awaits its $67 billion acquisition by Dell. EMC’s market share fell from 27.2% to 24.9% over the year.

NetApp had a bigger fall, dropping 15.6% to $645.5 million and a share decline from 13.6% to 11.9%.

HPE was followed by Hitachi in fourth, IBM in fifth and Dell in sixth. All three declined in revenue year-over-year, although Hitachi gained share from nine percent to 9.2 percent. All other vendors combined for $1.59 billion, a 7.8% increase from the previous year. “Others” market share grew from 26.2% to 29.3%.

In the total storage market, HPE grew 11% and jumped ahead of EMC into first with $1.42 billion. EMC, which generates all its revenue from external storage, fell 11.8% in the overall market to a 16.4% market share compared to HPE’s 17.3% share. No. 3 Dell, No. 4 NetApp, No. 5 Hitachi and No. 6 IBM all declined in overall storage revenue. Other vendors increased 5.3% but storage systems sales by original design manufacturers (ODMs) selling directly to hyperscale data center customers slipped 39.9%.

IDC put all-flash arrays at $794.8 million in the quarter, up 87.4% for the year. Hybrid flash arrays accounted for $2.2 billion and 26.5% of the overall storage market share.

HPE continued its momentum into the second quarter, according to recent earnings reports from the major vendors. HPE reported two percent year-over-year growth while EMC, NetApp and IBM all said their storage revenue declined. HPE CEO Meg Whitman said 3PAR all-flash revenue nearly doubled from last year.

“We estimate that we gained market share in the external disk for the tenth consecutive quarter and expect storage to gain shares throughout the remainder of the year on the strength of the 3PAR portfolio and new logo wins as we take advantage of the uncertainties surrounding the Dell-EMC merger,” Whitman said on HPE’s May 24 earnings call.

Top 5 Vendors, Worldwide External Enterprise Storage Systems Market, First Quarter of 2016 (Revenues are in Millions)
Vendor 1Q16 Revenue 1Q16Market Share 1Q15 Revenue 1Q15 Market Share 1Q16/1Q15 Revenue Growth
1. EMC $1,349.4 24.9% $1,530.4 27.2% -11.8%
2. NetApp $645.5 11.9% $764.9 13.6% -15.6%
T3. HPE* $535.7 9.9% $512.1 9.1% 4.6%
T3. Hitachi* $497.1 9.2% $506.9 9.0% -2.0%
T5. IBM* $429.0 7.9% $446.2 7.9% -3.8%
T5. Dell* $376.2 6.9% $395.1 7.0% -4.8%
Others $1,590.6 29.3% $1,475.8 26.2% 7.8%
All Vendors $5,423.6 100.0% $5,631.4 100.0% -3.7%
Source: IDC Worldwide Quarterly Enterprise Storage Systems Tracker, June 3, 2016