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Storage hardware sales hit by lower government spending

NetApp was the big winner as other vendors suffered from revenue declines

By Mikael Ricknäs
December 6, 2013 10:15 AM ET

IDG News Service - Storage vendors struggled with a decline in spending by the U.S. government and increased investment in public cloud capacity during the third quarter, according to IDC.

Worldwide disk storage systems market sales decreased by 5.6% to $7.4 billion during the quarter, the analyst firm said on Thursday.

The market was also negatively affected by an increased use of storage efficiency technologies and general price pressures, according to IDC. One saving grace for the storage vendors was strong demand for offerings targeted at heavily virtualized environments, IDC said.

The five largest disk storage vendors were EMC, Hewlett-Packard, IBM, Dell and NetApp. NetApp was the only one that increased revenue during the third quarter compared to the same period last year, up 5.9% to $748 million.

HP and IBM were hit hardest: their respective sales dropped by 10.2% and 11.2% to $1.27 billion and $958 million, respectively, according to IDC. EMC's revenue dropped by 1.3% to $1.76 billion.

Storage wasn't the only hardware segment that struggled during the third quarter. Earlier this week IDC said that server sales dropped by 3.7% during the three-month period. Demand for Linux and IBM's System z mainframes increased but sales of Windows servers were down slightly and Unix server revenue dropped by 31.3%.

Not every enterprise hardware segment was down during the third quarter, however, as the growing popularity of 10 Gigabit and 40 Gigabit Ethernet in data centers helped boost revenue for the entire Ethernet switch market by 6.5%, IDC said. Enterprises also continued to invest in Wi-Fi equipment to support bring-your-own-device programs.

Send news tips and comments to mikael_ricknas@idg.com

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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