Storage market shows signs of turnaround

Posted on February 01, 2004

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IDC reports market shares

By Lisa Coleman

Networked storage is sustaining growth in an overall disk storage systems market that is still recovering after plunging roughly 20% between 2000 and 2001, according to International Data Corp. (IDC), a market research firm in Framingham, MA.

By contrast, the $4.7 billion storage software market continues to show signs of healthy growth, with the storage resource management (SRM) segment growing 19% from Q3 2002 to Q3 2003 (the most recent reporting period), and the replication software market jumping up 13% in the same period.

Leading the disk storage system market comeback is the storage area network (SAN) market, with about $1.3 billion in Q3 2003 revenue—a 15.7% growth since Q3 2002. However, the overall disk storage system market declined 0.3% in the same period, says Hoang Nguyen, program manager at IDC.

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Overall capacity demand continued to be "relatively soft" and well below historical levels, growing a modest 36% year-over-year to 197 petabytes shipped in the third quarter of 2003, according to IDC.

"While the rate of capacity growth has declined in each of the last four quarters, price declines have also moderated and remained below 30% year-over-year for the last two years," says John McArthur, group vice president of storage hardware research at IDC.

However, networked storage remains the bright spot as the worldwide network-attached storage (NAS) market coupled with the open SAN market grew 12.3% year-over-year to $1.7 billion, with Dell showing 55.4% growth in revenues since Q3 2002. EMC led the way in that sector with a 28.9% market share and $501 million in Q3 2003 revenue, followed by Hewlett-Packard (25.6% market share), IBM (11.5%), Network Appliance (8.6%), and Dell, according to IDC (see charts, p. 1).

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The $1.36 billion (Q3 2003) SAN market (including Fibre Channel and iSCSI) was led by Hewlett-Packard with $427 million in revenue to earn a 31.2% market share. EMC had $371 in revenue and captured a 27.1% market share. Overall, Dell's growth between Q3 2002 and Q3 2003 jumped up 81.5%, for a 7.2% market share.

Since Q3 2002, the NAS market grew by 1.2%, with Network Appliance capturing a 37% market share, and EMC taking 35.4%.

Hitachi Data Systems (HDS) doubled its NAS revenue (albeit by only $3 million for a total of $6 million this past year) for 94% growth but with just a 1.5% market share. This growth is in part due to HDS's OEM agreement with NetApp that was inked early in 2003, which allows HDS to resell Net- App's NAS gateway."Other" NAS suppliers slipped in revenue and market share, but still account for a 14.4% of the total market.

The $2.7 billion external RAID market grew 5.8% from Q3 2002 to Q3 2003, with EMC and HP carving up the top spots with 21.4% and 20.1% market shares, respectively.

The worldwide storage software market grew 11.4% during Q3 2002-Q3 2003, with EMC and Veritas maintaining market share leads with 25% and 20.6%, respectively.

EMC led the SRM software market with a 48.6% market share as SRM software revenues grew 19% since Q2 2002. Veritas and HP captured 16.3% and 8.1%, respectively, of the SRM market.

The replication software market posted a 13% gain in revenues since Q2 2002, with EMC leading with a 44.1% market share in Q3 2003. Notably, HP's market share climbed up to 9.8% to compete with IBM's 10.2% share.


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