Storage Industry Ends 2003 with a Bang

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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%