EMC Sustains Lead in the Storage Software Market

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Gartner Dataquest announced today that while disk array growth stalled in 2001, storage software continued to deliver growth as companies looked to better use the storage hardware installed. Worldwide storage software revenue reached $4.9 billion in 2001, a 3 percent increase over 2000.

Gartner Dataquest said EMC continued its market leadership in 2001, as its worldwide market share grew to 30.4 percent, while its nearest rival, Veritas Software, totaled 19.8 percent. If the $1.6 billion in array-based software were excluded from the analysis, Veritas would be in the lead, and EMC would move to the No. 3 slot behind IBM.

"Six of the top 10 vendors were able to grow software revenue in a very challenging year," said Carolyn DiCenzo, chief analyst for Gartner Dataquest's storage group. "Hitachi Data Systems, which sells its storage array software directly and through Hewlett-Packard and Sun Microsystems, saw 59.4 percent growth and made the top 10 chart for the first time."

   Top 10 Storage Management Software Vendors for 2001 Based on New License Sales

                         (Millions of Dollars)
---------------------------------- --------------- -------------------
                        2001   2001 Market   2000  2000 Market  Growth
                      Revenue   Share (%)  Revenue   Share (%)    (%)
EMC                   1,496.1     30.4    1,352.7     28.3      10.6
Veritas Software        977.3     19.8      859.4     18.0      13.7
IBM                     701.2     14.2      529.8     11.1      32.4
Computer Associates     202.9      4.1      616.0     12.9     -67.1
Compaq                  198.3      4.0      142.9      3.0      38.8
Legato Systems          142.5      2.9      139.1      2.9       2.4
BMC Software            136.0      2.8      163.1      3.4     -16.6
StorageTek              119.9      2.4      143.5      3.0     -16.4
Network Appliance       108.6      2.2      112.5      2.4      -3.5
Hitachi Data Systems     91.5      1.9       57.4      1.2      59.4
Others                  753.9     15.3      669.2     14.1      12.7
Total                 4,928.2    100.0    4,785.6    100.0       3.0

Source: Gartner Dataquest (March 2002)

According to Gartner Dataquest, Computer Associates' new revenue reporting model makes its numbers difficult to interpret without a careful reading of their filings. CA now ratably recognizes license revenue over an extended period, which has resulted in substantially lower revenue recognized up front.

"The change in the world economic environment has put more pressure on vendors to provide a clear and compelling market vision that effectively positions the solution against competitive offerings and provides customer references confirming the advantage," DiCenzo said. "The opportunity for software vendors remains strong, but customers will be more careful with expenditures and vendors must bring more value to the table."

Additional information on the storage management software market is available in the Gartner Dataquest Research Brief "Storage Management Software Market Manages Growth." The Research Brief offers a first look at the leaders in the marketplace.

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