Disk storage sales defy economic downturn

IDG News Service - The disk storage industry defied economic gloom in the second quarter with strong increases in both capacity sold and revenue, according to two research companies.

Worldwide revenue from external disk storage systems grew 16.7% in the quarter, the biggest year-over-year increase that market has seen in two years, IDC said on Friday. Meanwhile, total disk storage systems revenue grew 10.9%, according to IDC. Vendors shipped a total of 1,777 petabytes of capacity in the second quarter, up 43.7% from a year earlier.

The sales growth was especially remarkable because it occurred across several market segments, IDC said in a news release.

Despite economic slowdowns in some parts of the world, storage demand has been growing rapidly, driven in part by increased use of video and by regulations that force enterprises to preserve more data. IDC has estimated that overall demand for storage capacity is growing by about 60% per year.

IDC defines a disk storage system as a set of storage elements associated with three or more disks. Some are located inside server cabinets and some are external. While the total disk storage system market hit $6.9 billion in revenue in the second quarter, the external disk storage market grew to $5.08 billion.

EMC Corp. kept its lead in the external disk storage business with 21.7% of the market, followed by IBM and Hewlett-Packard Co. in a statistical tie with 13.1% and 12.9%, respectively. Among major vendors, EMC saw the greatest revenue growth; its second-quarter sales were $1.1 trillion, up 19.7% from $920 billion a year earlier. HP's growth rate was the lowest, at 8.2%, and the company lost a full percentage point in market share.

In the total disk storage systems market, HP fared even worse, with a 1.2% drop in revenue; all other major vendors gained. Though HP remained in the lead, its market share fell to 18.1%, leaving the company nearly tied with No. 2 IBM, whose market share was 17.7%. EMC was in third place, and Dell Inc. was in fourth. Sun Microsystems Inc. had the strongest rise in revenue, at 29.2%. Its revenue grew to $494 million and its market share to 7.1%.

According to figures from research company Gartner Inc., the external controller-based disk storage market grew 18.8% in the second quarter, reaching $4.46 billion in revenue. EMC lost half a percentage point of market share but maintained a commanding lead at 24.3%, experiencing 16% revenue growth in the quarter. Next was IBM with 14.1% of the market, followed by HP, Dell and Hitachi Data Systems Corp. NetApp Inc. came in sixth but had a strong 22.9% revenue gain, Gartner said.

Sun's revenue shot up 34.7% in the quarter, according to Gartner, which attributed the gain to the company's StorageTek 2000, 6000 and 9000 series products. A relative newcomer to storage, having entered the market through its acquisition of StorageTek and other deals, Sun had 6.6% of the market.

Gartner found Japan to be the leading growth market; revenue there was up 38.7% from a year earlier. Latin America was second with 25.2% growth, while Europe, the Middle East and Africa had growth of 22.3% and the Asia-Pacific region 16.6%. North America trailed all other regions with 12.7% growth, according to Gartner.