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Traditional storage vendors feel the heat from newcomers

Revenues for external disk storage among all vendors fell 1.4% from last year during the second quarter, according International Data Corp.’s worldwide disk systems tracker.

It marked the fourth consecutive quarter that high-end storage sales declined, and IDC noted that midrange system revenue also dropped.

Startups and smaller companies made up a bigger piece of the external storage pie, which came to about $5.9 billion in the quarter. The “others” category – all vendors except for EMC, NetApp, IBM, Hewlett-Packard, Dell and Hitachi Data Systems — increased revenue 11.1 percent in the quarter and market share was at 21 percent compared to 18.7% during the same time last year.

IDC reported that leader EMC experienced a 5.2 percent decline in year-over-year revenue for the second quarter, with NetApp registering a 3 percent decline and IBM a 4.7 percent drop in external storage sales. Hitachi was hit the hardenst with a 12% year-over-year decline and Dell with the lowest at one percent. HP experienced a nominal gain with a 0.4 percent increase. EMC grabbed 30.1% of the external disk storage revenue during the second quarter but that was down 31.2% from the prior year.

NetApp and IBM followed EMC with shares of 13% and 12.1% respectively. In comparison, NetApp had 31.2% in revenue sales in the second quarter last year and IBM had 12.5% in the same time period. HP gained share during the second quarter with 10.1% compared to 10% in second quarter last year.

This picture is in stark comparison to smaller companies, like hyper-converged vendor Nutanix and flash vendor Nimble. Nutanix reported that it had exceeded $50 million in revenue for the second quarter that finished in July this year,more than tripling its revenue for the same quarter a year ago. The company picked up larger customers with 29 companies buying more that $1 million of Nutanix products and services. That number has more than doubled since January when Nutanix had 13 million-dollar customers.

Nimble reported it had hit record numbers with $53.8 million in revenue and 663 new customers during its fiscal second quarter this year and closed 444 deals in excess of $100,000 for the 12-month period ending on July 31. Nimble’s revenue increased 89 percent over last year.

“Large companies are starting to feel the impact,” said Nutanix senior vice president of product management Howard Ting. “The disruption created by young companies like Nutanix is eating into their revenue.”

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