Report: Disk Storage Sales Still a Mixed Bag

While the semiconductor and PC industries have begun their economic turnaround, the disk storage systems market is still waiting, according to one analyst firm.

A report issued Friday by Framingham, Mass.-based IDC says factory revenue for worldwide disk storage systems registered in at $4.73 billion in the second quarter of 2003. That’s down 3.9 percent compared with the second quarter of 2002.

The report also suggests overall storage capacity still outpaces revenue, growing 36 percent year-over-year to 181.6 petabytes shipped during the second quarter.

The Worldwide Disk Storage Systems Quarterly Tracker includes quarterly shipments and revenues (both customer and factory), Terabytes, Dollars per/Gigabyte, Gigabyte/Unit, and Average Selling Value. Each criteria is segmented by location, installation base, operating system, vendor, family, model, and region.

“We’ve seen significant declines in Asia, especially Japan (34 percent over last year). In fact the spending outside the U.S. is worse than we thought given how much the dollar has declined,” IDC senior analyst John McArthur told internetnews.com.

“The results are decidedly mixed, providing no indication of a near-term, global recovery in the disk storage systems market. What we have is people holding onto what they’ve got and only waiting to upgrade until they have to. There is continuing demand for capacity, but we’re still in the 40 percent range. That is nowhere close to what we had in the ’90s when we saw 80 and 90 percent growth rates,” continued McArthur.

The One Bright Spot on the Map

In the second quarter, Hewlett-Packard led the total disk storage system market, with 26.7 percent revenue share, followed by IBM and EMC , with 20.2 percent and 12.7 percent revenue share, respectively. Sun Microsystems and Dell round out the Top 5 list.

IBM and Dell posted the strongest year-over-year market share gain during the second quarter among the top 5 vendors, with 2.5 and 1.5 points of share gain respectively. Sun claimed victory for its Network Storage division by increasing its share in vendor revenue for total market and UNIX disk storage systems for the third quarter in a row.

“This is the second quarter of growth in North America, an indication of a turnaround in that region,” McArthur said. “Since the U.S. is the leading indicator, we’re hopeful a North American pickup is a good sign of things to come.

IDC’s numbers show revenue also decreased 5 percent year-over-year in the total external disk storage system market in the second quarter to $3.2 billion. HP maintained its number one position with 21.5 percent revenue share. EMC was number two with 18.8 percent revenue share.

Meanwhile, the total external RAID market declined less than the overall external market, with a 1.4 percent year-over-year decline to $2.87 billion. EMC led the total external RAID market with 21 percent revenue share, followed closely by HP with 20 percent revenue share.

EMC, HP, and NetApp Reign over NAS/Open SAN Components Market

EMC still remains champ when the numbers for network attached storage (NAS) and Open SAN components are combined. The Hopkinton, Mass.-based company maintained 27.5 percent revenue share, followed by HP and IBM with 24.5 percent and 11.4 percent revenue share, respectively.

When taken separately, HP bolstered its share in the Open SAN market with a 29.7 percent revenue share, followed by EMC. The NAS market finds EMC and Network Appliance in a dogfight for the number one position, with each holding 37 percent market share.

“In the challenging global IT market, HP is consistently executing on its storage roadmap and furthering its HP Adaptive Enterprise strategy,” says Bob Schultz, senior vice president and general manager, HP Network Storage Solutions.

“Customers continue to turn to HP for adaptive infrastructure solutions that simplify SANs and solve data growth and management challenges today, while helping to deliver business agility and competitive advantage tomorrow,” continues Schultz.

It’s important to note that IDC’s numbers do not include original equipment manufacturer (OEM) sales. For example, Hitachi Data Systems (HDS) sales do not reflect their OEM sales to Sun Microsystems and Hewlett-Packard. However, Dell’s OEM relationship with EMC is counted towards Dell’s numbers.

The study covers controllers, cables, and host bus adapters associated with three or more disks drives, such as a direct attach storage devices (DASD) or hard disk drives (HDD), but does not include infrastructure storage hardware (i.e. switches) and non-bundled storage software.

This story originally appeared on Internet News.

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