Disk array market shares shifting

By Dave Simpson

According to estimates released last month by Gartner Inc., EMC held on to its number-one ranking in the market for external disk arrays, gaining a 2% market share on a 2003-to-2004 revenue surge of 15.5%.

Meanwhile, Hewlett-Packard, IBM, and Sun Microsystems experienced negative revenue growth and lost market share (see figures). Hitachi Data Systems maintained its number-four spot with minor revenue gains and a slight dip in market share.

In terms of revenue growth, the big winners were Network Appliance (25.6% gain in revenues), Dell (23.4%), StorageTek (18.7%), and EMC (15.5%).

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Eight vendors accounted for almost 80% of total revenues, with “other” disk array vendors accounting for 21.4% of the market-a minor increase from a 21.1% market share in 2003.

Overall, the external disk subsystems market experienced an anemic 5.1% revenue increase in 2004, representing a total market of $13.5 billion. The relatively slow growth was attributable in part to the declines experienced by Hewlett-Packard, IBM, and Sun, all of which went through product transitions in the second half of 2004.

Roger Cox, vice president of Gartner’s storage research group, attributes Network Appliance’s revenue surge to the company’s ability to penetrate “mission-critical” application environments as well as strong gains in the database market.

Cox also cites NetApp’s unified product line, which leverages a single operating system and cross-platform applications (both of which simplify storage management), as an important factor in NetApp’s 25.6% revenue growth.

Cox says that HP’s lackluster performance was due in part to being late to market with low-cost, high-capacity disk drives for its EVA and MSA disk arrays, while IBM’s revenue growth shortfall can be attributed in large part to its “inability to seamlessly change over from the Enterprise Storage Server (‘Shark’) arrays to the newer DS6000 and DS8000 systems.” And Hitachi’s relatively stagnant revenue increase was due in part to long selling cycles associated with its new TagmaStore systems in the second half of last year.

International Data Corp. (IDC) also recently released figures for the external disk subsystems market. IDC’s numbers differ slightly from Gartner’s. For example, IDC pegs EMC’s 2004 market share at 21.1%, followed by Hewlett-Packard (18.7%), IBM (12.6%), Hitachi (8.6%), Dell (7%), and Sun Microsystems (6.2%).

In terms of 2003-to-2004 revenue growth among the top-six vendors, Dell topped the list with an 18.7% gain, followed by EMC (18.4%) and Hitachi (1.1%), according to IDC’s estimates.

This article was originally published on April 01, 2005