Storage Industry Ends 2003 with a Bang

UPDATE: A fourth quarter surge in worldwide sales closes out 2003 in fine form, according to new market research results from Gartner and IDC.

The storage industry closed out 2003 in fine form, according to new market research results from Gartner and IDC.

Worldwide sales surged 18.7% sequentially in the fourth quarter, Gartner research VP Roger Cox reports.

"The overall market did a little bit better in 2003 than what was expected, and the fourth quarter was particularly strong," Cox told Enterprise Storage Forum. "This confirms what some of the storage executives have been saying, which is that the economy is getting a little better."

The worldwide external controller-based disk storage market increased 6% to $12.89 billion in 2003, according to Gartner's numbers released today.

Another encouraging sign was that the high-end storage market began to rebound. "It was a very good year on the high end," Cox said.

Cox expects the industry to grow 7.9% in 2004, a healthy, if not quite booming, rate. "I don't think the market will ever get back to the growth rates of 1998-1999, when it was growing 20% a year," he added.

IDC tells a similar tale, with worldwide external disk storage systems posting the largest quarterly gain since the economic downturn began, according to IDC's Worldwide Disk Storage Systems Quarterly Tracker. Factory revenues grew 8.4% year-over-year to $3.7 billion in the fourth quarter of 2003.

"The U.S. was the first to feel the downturn and is now leading in the recovery with a healthy 7% growth rate," says John McArthur, group vice president of Storage research at IDC.

HP maintained its lead in the external disk storage systems market with 21.7% revenue share, according to IDC's numbers, followed by EMC and IBM. Among the top 5 suppliers, Dell and EMC posted the strongest year-over-year revenue growth during the fourth quarter, with 50.0% and 20.5% growth respectively.

EMC enjoyed a resurgence, reversing market share loss in the worldwide external controller-based disk storage market with 7% growth and a 0.4% share gain, according to Gartner, for $2.65 billion in revenues and a 20.6% share.

Number two player HP grew sales 8% and also added 0.4% to its market share, for a total of $2.39 billion in sales and an 18.6% share.

The number three through five vendors – IBM , Hitachi/HDS , and Sun – all lost share on the year. Cox said IBM's FAStT line was "very strong," but Big Blue's Shark line lost a bit of ground to EMC's resurgent Symmetrix line. Hitachi was expected to lose ground because of developments in its business with HP and Sun, according to Cox.

Number six vendor Dell outpaced them all, growing 44% and gaining 1.3% market share. Dell now has 4.9% of the disk storage market.

That's good news for EMC, since much of Dell's storage sales come from the companies' CLARiiON partnership.

The Dell-EMC partnership is a "win-win proposition for both companies," Cox said. Dell's manufacturing and sales increase EMC's volume "so much that it helps reduce the cost of goods and burden" for EMC.

EMC enjoyed similar results in the external RAID disk storage systems and network-attached storage (NAS) markets, with IDC's year-end report confirming that the company retained pole position in both market segments. In fact, EMC widened its lead in the RAID market, with the highest overall increase in market share (1.7) next to partner Dell's 1.8.



Worldwide Disk Storage System Market


Vendors Q4 2002
Market Share
Q4 2003
Market Share
Share
Change
HP 25.4% 25.6% 0.2
IBM 23.3% 25.4% 2.1
EMC 11.7% 13.3% 1.6
Dell 5.1% 6.5% 1.4
Hitachi/HDS 4.9% 5.1% 0.2
Sun Microsystems 5.9% 5.1% -0.8
Net App 2.5% 2.7% 0.2
Others 21.2% 16.3% -4.9
Total 100.0% 100.0%
Source: IDC (March 5, 2004).



Worldwide External Controller-Based Disk Storage

Vendor Market Share Estimates, 2003


Vendors Total 2002 Share (%) Total 2003 Share (%) Growth (%) Share Gain/Loss
EMC 2,470 20.2 2,652 20.6 7% 0.4
Hewlett-Packard 2,222 18.2 2,394 18.6 8% 0.4
IBM 1,662 13.6 1,690 13.1 2% (0.5)
Hitachi/HDS 1,292 10.6 1068 8.3 -17% (2.3)
Sun Microsystems 850 7 881 6.8 4% (0.2)
Dell 439 3.6 634 4.9 44% 1.3
Network Appliance 514 4.2 586 4.5 14% 0.3
StorageTek 121 1 142 1.1 17% 0.1
Others 2,628 21.5 2,847 22.1 8% 0.6
Total Vendor Revenue   12,198 100 12,894 100 6%
Source: Gartner Research (2004).

Sales are in Millions of Dollars.


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