IBM surpasses HP in storage hardware sales

IBM moves into second place behind storage market share leader EMC

IBM earns bragging rights for surpassing Hewlett-Packard Co. in 2006 storage hardware sales, though it still trails industry leader EMC Corp., according to an industry report published today.

Measured in terms of revenue, IBM's share of the global external-controller disk storage market grew to 15.8% in 2006, from 14.5% in 2005, while HP's share dropped to 13.1% from 14.7%, according to a Gartner Inc. report. That elevates IBM to second place behind EMC, which grew its market share to 24.8% last year from 23.4% in 2005, according to Gartner.

"I think the records will reflect that it's been about 10 years since we passed HP," said Andy Monshaw, general manager of IBM storage. As recently as five years ago, HP had a 15-point storage market share lead over IBM.

Monshaw attributed IBM's performance to a refreshed product line, a focus on selling systems rather than individual products and increased sales in the small-to-midsize business market.

HP Chairman, CEO and President Mark Hurd acknowledged the weakness in his company's storage business during a presentation at a Morgan Stanley Technology Conference Monday.

HP's storage revenue grew only 3% in its fiscal first quarter, which ended Jan. 31. Hurd attributed that performance to the fact that much of the company's product line is tape storage, which is a declining business. However, sales of its EVA line of disk storage products grew 18% in the quarter.

Hurd also said during the company's quarterly earnings announcement on Feb. 20 that HP needs to expand its storage sales force. "We just don't cover enough accounts," Hurd said.

Gartner reported that Hitachi Data Systems Corp. was the No. 4 storage vendor, with 9.6% of the market, followed by Dell Inc. with 7.6%, Network Appliance Inc. with 7.2% and Sun Microsystems Inc. with 6.1%.

Gartner noted that the storage market is increasingly dominated by the top players and is driven by industry consolidation, more effective marketing and strong channel partnerships. The top seven storage vendors accounted for 84.2% of the market in 2006, up from 81.5% in 2006.

Copyright © 2007 IDG Communications, Inc.

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