Yenra : Hardware : Disk Storage Systems : Analyzing the global disk storage market

Worldwide disk storage systems factory revenues were $4.8 billion in the third quarter of 2003 (3Q03), down 0.3% compared with the third quarter of 2002, according to IDC's Worldwide Disk Storage Systems Quarterly Tracker. Demand continued to be relatively soft and well below historical levels, growing a modest 36% year-over-year to 197 petabytes shipped in the third quarter.

"While the rate of capacity growth has declined in each of the last four quarters, price declines have also moderated and remained below 30% year-over- year for the last two quarters," said John McArthur, group vice president of Storage Hardware Research at IDC. "Rather than waging price wars, suppliers are increasingly turning to higher-value software, services, and application integration to gain competitive advantage."

In the third quarter, HP continued to lead the total disk storage system market, with 26.4% revenue share, followed by IBM and EMC with 21.1% and 12.9% revenue share, respectively. Among the top 5 suppliers, Dell and EMC posted the strongest year-over-year factory revenue growth during 3Q03, with 22.9% and 20.5% gain respectively. EMC's strong year-over-year performance was due in part to an easy comparison, with an unusually weak third quarter in 2002. EMC also had the largest year-over-year market share gain of 2.2 points. Dell moved into the number 4 position on strong sales of products OEM'ed from EMC, as Sun fell to a statistical tie with Hitachi for the number 5 position.

In the total external disk storage system market, revenue increased 1.5% year-over-year in 3Q03 to $3.2 billion. HP maintained its number 1 position with 21.8% revenue share. EMC was number 2 with 19.2% revenue share. Regardless of who designs and manufactures the disk storage system, server suppliers remain an important route to market. The top four server vendors (HP, IBM, Dell, and Sun) captured almost 48% of the external storage market, up slightly from the third quarter of 2002, leveraging OEM relationships with storage companies such as Hitachi (HP and Sun), EMC (Dell), LSI Logic Storage Systems (IBM), and DotHill (Sun).

EMC continues to maintain its leadership in the total network storage market (NAS combined with Open SAN) with 28.9% revenue share, followed by HP and IBM with 25.6% and 11.5% revenue share, respectively. EMC, HP, and IBM increased market share during the quarter in this segment. In the Open SAN market, which grew 15.7% compared to the same quarter a year ago, HP led with 31.2% revenue share followed by EMC with 27.0% share. In the NAS market, Network Appliance and EMC continue their extensive competition, remaining in a statistical tie with $136 million and $130 million in NAS revenue, respectively.

IDC defines a Disk Storage System as a set of storage elements, including controllers, cables, and host bus adapters, associated with three or more disks drives (direct attach storage device [DASD]/hard disk drive [HDD]). A disk storage system may be located outside of or within a server cabinet and the average cost of the disk storage systems does not include infrastructure storage hardware (i.e. switches) and non-bundled storage software.

IDC produces the Worldwide Disk Storage Systems Quarterly Tracker, a quantitative tool for analyzing the global disk storage market on a quarterly basis. The Tracker includes quarterly shipments and revenues (both customer and factory), Terabytes, $/Gigabyte, Gigabyte/Unit, and Average Selling Value. Each criteria can be segmented by location, installation base, operating system, vendor, family, model, and region.