Compliance Drives Storage Sales

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A handful of vendors pushed disk storage revenue to $3.54 billion for the first quarter of 2005, a year-over-year increase of 11 percent, according to a new Gartner report.

Double-digit revenue increases from Dell, Network Appliance, IBM and EMC spurred a “healthy rebound” from a stagnant second half of 2004, analysts said. Compliance regulations continue to fuel sales onward and upward, as customers scramble to meet the demands of Sarbanes-Oxley, HIPAA and other regulations.

Among the top vendors, Dell enjoyed a revenue increase of 36 percent, while Network Appliance grew sales 27 percent, according to Gartner analyst Roger Cox.

Dell is proving to be a worthy competitor in midrange storage, said Cox. Dell’s success is tied to its direct sales model and its ability to offer much the same products as rivals for less money.

Dell is also enjoying quite a boost from long-time partner EMC, which creates storage systems that Dell then repurposes and sells as its own. Analysts have said EMC’s technological prowess has been a boost to Dell’s more modest engineering.

EMC, not surprisingly, remained No. 1 in storage revenue at 23 percent, growing 11 percent for the year and reflecting the industry’s overall growth.

Entrenched as a storage systems vendor, EMC is also growing its business through software sales, professional services and successful channel partners, including a vow to “make storage simple” for small and medium-sized businesses.

Network Appliance continued its quarterly year-over-year growth of more than 20 percent, which Cox attributed to the company’s lone management platform, easy-to-understand product lines and overall execution.

Known as a major provider of network-attached storage (NAS), NetApp recently spread its wings by agreeing to buy storage security appliance maker Decru for $272 million. NetApp also boosted its pact with IBM to make life harder for EMC.

IBM, meanwhile, enjoyed disk sales growth of 13.6 percent, which Cox said was triggered by shipments of its new DS8000 and DS6000.

The machines, which feature server technologies, such as virtualization, helped reverse the declines Big Blue experienced in the second half of 2004 due to product-transition issues.

While the results of the report were overall quite positive and indicative of an industry hungry for more gear to digest massive loads of corporate data, Sun Microsystems continues its storage freefall in the disk space, watching its revenues spiral downward 17.4 percent.

Cox said Sun is having trouble selling the high-end StorEdge 9000 from HDS. The company took steps to bolster its position with the StorEdge 6920, which helps users consolidate applications on a single system that provides scalability and storage pooling.

But the company has yet to reap any rewards from it.

Article courtesy of

Clint Boulton
Clint Boulton
Clint Boulton is an Enterprise Storage Forum contributor and a senior writer for covering IT leadership, the CIO role, and digital transformation.

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