IBM, NetApp Fare Best in Slumping Data Storage Market

Data storage sales have now declined for three straight quarters, but analysts at IDC are seeing some bright spots.

Worldwide external disk storage systems factory revenues fell 18.3 percent year-over-year in the second quarter to $4.1 billion, according to IDC, while the total disk storage systems market — including server sales — fell 18.7 percent to $5.7 billion. Total disk storage systems capacity shipped was 2,345 petabytes, up 15.2 percent.

Despite the continued weakness, IDC Storage Systems research analyst Liz Conner noted in a statement that “certain sweet spots in the market continue to thrive.”

Entry-level (under $15,000) iSCSI SANs and Fibre Channel SANs posted year-over-year growth of 57.2 percent and 66.8 percent, respectively, as customers look for enterprise-class features at a more affordable price. And midrange NAS (between $15,000 and $50,000) grew 20.7 percent, “as file-level data generation continues to be a hot topic for many customers,” said Conner.

Of the top five external storage vendors by market share, IBM (NYSE: IBM) and NetApp (NASDAQ: NTAP) fared best, with year-over-year sales declines of 8 percent each. EMC (NYSE: EMC) retained its commanding lead with a 21.5 percent market share despite a 19.5 percent sales decline, while HP (NYSE: HPQ) suffered a 28.6 percent revenue drop and Dell (NASDAQ: DELL) saw its sales fall by 13.8 percent.

IBM had a 14.9 percent market share in the quarter, followed by HP with 11.4 percent, Dell with 9.8 percent and NetApp at 8.9 percent.

IDC Enterprise Storage research manager Steve Scully noted that the research firm is “beginning to see several storage vendors whose external disk storage revenues are showing sequential (quarter-over-quarter) growth, indicating some stability beginning to take shape in the market.”

The total network disk storage market (NAS combined with Open and iSCSI SAN) fell 15.3 percent from the year-ago quarter to more than $3.2 billion. EMC held onto its lead with a 26 percent revenue share, followed by IBM with 13.8 percent.

The Open SAN market was down 23.8 percent from the year-ago quarter, led by EMC with a 23.1 percent revenue share.

The NAS market was down just 6.8 percent year-over-year, led by EMC with a 38.7 percent market share, followed by NetApp with 26.1 percent.

The iSCSI SAN market grew 27.2 percent from the year-ago quarter, with Dell in the lead with a 35.3 percent revenue share, followed by EMC with 15.7 percent.

NetApp Software Sales Hold Up

IDC also reported that storage software sales fell 9.8 percent from the year-ago quarter to $2.8 billion, but edged higher from the first quarter.

IDC said the replication market grew 5 percent sequentially in the second quarter, led by NetApp with 20 percent growth, while the data protection and recovery market grew 3 percent from the first to the second quarter, led by Symantec (NASDAQ: SYMC), IBM and EMC. Device management and archiving sales also improved.

NetApp was the only one of the top five storage software vendors to show overall year-over-year growth in the second quarter, with software sales inching up 0.8 percent to $241 million. The other four all saw double-digit year-over-year sales declines.

EMC’s market share lead narrowed over second-place Symantec, 22.4 percent to 18.5 percent. IBM was third at 11.5 percent, followed by NetApp at 8.5 percent and CA (NYSE: CA) at 4.1 percent.

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Paul Shread
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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