Data Storage Sales Hit the Skids

Recent reports from IDC and Gartner confirm what anyone following quarterly earnings reports already knows: It’s been a tough year for data storage vendors.

Both analyst firms reported late last week that the networked storage market declined by more than 10 percent in the first quarter. Gartner said overall sales declined by 11.1 percent to $3.8 billion, while IDC had the market down 13.6 percent to $4.2 billion.

Both firms had EMC (NYSE: EMC), IBM (NYSE: IBM) and HP (NYSE: HPQ) faring worse than the overall market, with HP down the most at around -20 percent.

Dell (NASDAQ: DELL) and Hitachi fared the best among the top seven vendors, with sales declines in the high-single digits. NetApp did a little better than the overall market, while Gartner had Sun’s (NASDAQ: JAVA) storage hardware sales down 30.4 percent despite strength in its Open Storage line.

Oracle (NASDAQ: ORCL), which is in the process of acquiring Sun, has said it plans to keep Sun’s hardware business, including storage.

Dell benefited from its EqualLogic iSCSI product line, as the iSCSI SAN market’s 40.5 percent revenue growth made it “the only installation environment segment that ended the quarter in positive territory,” according to Natalya Yezhkova, research manager for IDC Storage Systems.

“While still a relatively small segment of the market, iSCSI SAN is the bright spot for end users and for vendors, as it helps end users to deploy network storage, often with enterprise-class functionality, at a lower price point than traditional FC SAN, and thus creates more selling opportunities for vendors,” Yezhkova said in a statement.

Systems below $50,000 and above $300,000 were flat to up, the low end benefiting from price-conscious customers and the high end from aggressive discounting, according to IDC.

The overall disk storage systems market (both networked and server-attached) fell 18.2 percent to $5.6 billion, according to IDC, while capacity shipped grew 14.8 percent to 2,146 petabytes.

IDC also reported that the storage software market fell 5.2 percent in the first quarter to $2.8 billion, the first decline in more than five years. Symantec (NASDAQ: SYMC) was the only vendor to post year-over-year sales growth in the quarter. EMC and HP fell double digits, while NetApp, IBM and CA (NYSE: CA) declined around 5 to 7 percent.

Device management, replication, and infrastructure sales fell, while file system and management sales grew, according to Laura DuBois, IDC’s research director for Storage Software.

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Paul Shread
eSecurity Editor Paul Shread has covered nearly every aspect of enterprise technology in his 20+ years in IT journalism, including an award-winning series on software-defined data centers. He wrote a column on small business technology for, and covered financial markets for 10 years, from the dot-com boom and bust to the 2007-2009 financial crisis. He holds a market analyst certification.

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