By Lisa Coleman
Network storage is sustaining growth in a disk storage systems market still recovering after plunging roughly 20% from 2000-2001, according to IDC.
By contrast, the $4.7 billion worldwide storage software market is continuing to show signs of healthy growth with the storage resources management (SRM) market growing 19% from Q3 2002 to Q3 2003 and storage replication software market jumping up 13% in the same period, according to the latest worldwide quarterly storage software tracker from IDC.
Leading the disk storage system market comeback is the worldwide open storage area network (SAN) market with $1.3 billion or 15.7% growth since Q3 2002 although the overall disk storage system market declined 0.3% in the same period, reports IDC in its worldwide disk storage systems quarterly tracker for Q3.
"The last couple quarters we've seen improvements on a quarterly basis," says Hoang Nguyen, program manager at IDC. "Also, there's a huge correlation between servers and storage systems. In the server market over the last two quarters, there's been an up-trend. You can do some correlation that the storage market will follow eventually; it's a good sign."
Yet 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, network 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 since Q3 2002, yet EMC led the way in that sector with 28.9% market share and $501 million in factory revenue, according to IDC.
The $1.36 billion open SAN market (including Fibre Channel and iSCSI) was led by Hewlett-Packard with $427 million in revenue to earn 31.2% market share, reported IDC. EMC earned $371 revenue and captured 27.1% market share. Overall, Dell's growth between Q3 2002 and Q3 2003 increased 81.5% for 7.2% market share.
Since Q3 2002, the NAS market grew by 1.2% with Network Appliance capturing 37% market share and EMC taking 35.4%. Both companies have been competing head-to-head in the NAS market for several years.
Hitachi Data Systems (HDS), however, doubled its NAS factory revenue (albeit by only $3 million for a total of $6 million this past year) for 94% growth but with just 1.5% market share. This may be due to its OEM agreement with Network Appliance that was inked early in 2003. The agreement allows HDS to resell Network Appliance's NAS gateway.
Notably, "other" NAS suppliers--BlueArc, Iomega, Procom, Snap Appliance, etc.--slipped in revenue and market share; however, they still comprise 14.4% market share.
The $2.7 billion worldwide disk storage system external RAID market grew 5.8% from Q3 2002 to Q3 2003 with EMC and HP carving up the top spot with 21.4% and 20.1% market share, respectively. The worldwide disk storage system external market (includes storage outside of the server box) grew at a nominal 1.5% to $3.2 billion with HP and EMC bringing in 21.8% and 19.2% market share, 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.
All areas of software grew sequentially from Q2-to-Q3 2003, and IDC expects that storage software will post a strong gain for the entire year of 2003. Since Q2 2002, however, the replication and SRM markets have posted the biggest gains.
EMC led the SRM market with 48.6% market share as SRM software grew at 19% since Q2 2002. Veritas and HP captured 16.3% and 8.1% share, respectively. In the past year, SRM was a hot technology with the acquisition of several vendors. IBM acquired TrelliSoft, Veritas bought NTP's SRM, and EMC acquired Astrum Software. Also, within the last two years, Windows-based SRM vendor WQuinn was acquired by Precise that was later acquired by Legato, which was acquired by EMC.
The storage replication software market posted a 13% gain since Q2 2002 with EMC, again, leading with 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.