According to recently released figures from International Data Corp. (IDC), EMC held on to the top position in NAS revenues in the second quarter of this year, with $191 million in worldwide revenues—up 16.9% from the second quarter of 2004. Network Appliance came in second, with $167 million in NAS revenues, up 6.5% from Q2 2004.

According to IDC, EMC had a 40.2% share of NAS market revenues in the second quarter, compared to a 35.2% slice for Network Appliance.

However, as it did when IDC released its Q1 estimates, Network Appliance was quick to object to IDC’s policy of including shipments of content-addressed storage (CAS) platforms in its NAS revenue tracking. If EMC’s Centera CAS platform revenues were not included in IDC’s NAS numbers, the gap between EMC and NetApp would tighten considerably.

IDC defines NAS as “an external disk storage system that attaches to a LAN, communicates at a file level, and contains an internal operating system optimized for file serving.” However, Network Appliance officials argue that CAS systems do not communicate using file protocols (NFS or CIFS) and are optimized for storing objects, not files. In short, CAS is not NAS, according to NetApp.

(Because of IDC’s categorization scheme, Hewlett-Packard’s NAS revenues are also boosted due to sales of its RISS CAS platform.)

Other research firms typically track CAS as a separate product category.

What’s surprising in the NAS market-share numbers and revenues is the precipitous drop between the top two vendors (EMC and NetApp) and the rest of the NAS pack (see table below). Compared to NetApp’s $167 million in quarterly revenues, Hewlett-Packard came in third with only $30 million in Q2 revenues (6.4% market share), followed by Dell ($20 million, 4.1% market share) in fourth place, according to IDC’s figures.

Rounding out the top-nine NAS vendors, in decreasing order of market share, were Hitachi (1.2%), Fujitsu (1.2%), Sun (0.8%), NEC (0.4%), and IBM (0.2%). (IBM resells Network Appliance’s NAS filers.)

For those keeping score, three of the top nine vendors experienced lower revenues in Q2 2005 versus Q2 2004. Surprisingly, Dell led that pack with a 24.7% decline, followed by IBM (13.1% decline) and Hitachi (7.4%). (The “other” group of NAS vendors declined in revenues by 5.4%.)

Although ranking seventh in terms of NAS revenues in the second quarter, Sun posted an impressive gain of 357.3% in Q2 2005 vs. Q2 2004.

In virtually every other category of disk systems tracked by IDC, EMC was the leader in Q2 revenues. The one exception was in the overall disk storage system market, which includes both internal and external disk shipments, where Hewlett-Packard came in first, followed by IBM, EMC, and Dell.

One IDC figure that Network Appliance did not quibble about was the research firm’s estimates for iSCSI market shares, which put NetApp in the leadership position with a 41.6% share followed by EMC with a 26% cut of worldwide iSCSI disk array revenues. Overall, the iSCSI market grew 140% year over year.

However, even the iSCSI category can be contestable because, although IDC tracks revenues from disk systems shipped with iSCSI capabilities (which virtually all of NetApp’s systems have), that does not necessarily mean that customers are using the iSCSI functionality.


Worldwide NAS Market
Factory revenue ($mil) Factory revenue ($mil) Market share Market share YOY growth
2004Q2 2005Q2 2004Q2 2005Q2 2005Q2/2004Q2
EMC $163 $191 37.7% 40.2% 16.9%
Network Appliance $157 $167 36.2% 35.2% 6.5%
HP $24 $30 5.4% 6.4% 28.7%
Dell $26 $20 6% 4.1% (24.7%)
Hitachi $6 $6 1.5% 1.2% (7.4%)
Fujitsu $4 $6 0.8% 1.2% 67.1%
Sun $1 $4 0.2% 0.8% 357.3%
NEC $2 $2 0.5% 0.4% 1.9%
IBM $1 $1 0.3% 0.2% (13.1%)
Other suppliers $50 $47 11.5% 9.9% (5.4%)
Total $434 $475 100% 100% 9.5%

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