Storage Nets Surging, Says IDC

Networked storage revenue grew at more than three times the rate of overall disk storage last quarter, according to the latest figures from IDC (see IDC: External Disk Revenues Up 8%).

IDCs quarterly disk tracker numbers, released today, place the worldwide networked storage market at $2.1 billion for the second quarter 2004, the second highest quarter ever. Networked storage revenue was $2.15 billion in the fourth quarter of 2003, before slipping to $1.98 billion in the first quarter of this year (see IDC: Networked Storage Up and IDC: SANs Gather Steam).

Networked storage (NAS and SAN) revenue increased 17.9 percent from last year, compared to 8 percent growth for external disk storage and 5 percent for total disk storage.

“It was a very good quarter for networked storage,” says Brad Nisbet, IDC disk storage systems research manager. “We are now seeing networked storage have good growth among all pricing segments of the market, as the major vendors’ investment in midrange and even the entry level is paying off.”

SAN revenue rose 18.6 percent to $1.7 billion, and six of the top seven SAN vendors recorded double-digit growth. NAS revenue grew 15.2 percent.

In total networked storage revenue, EMC Corp. (NYSE: EMC) led the way, with $595 million for 28.3 percent market share (see EMC Bucks June Swoon). This represents 26.1 percent year-over-year growth and a market share increase from 25.1 percent, according to IDC.

It’s no secret HP had a rough quarter for storage (see HP Storage Slammed). Its networked storage revenue grew nine percent to $470 million from last year, but HP’s market share fell from 24.2 percent to 22.4 percent.

But HP's NAS revenue climbed 64.2 percent and its market share jumped from 4 percent to 5.7 percent.

Network Appliance Inc. (Nasdaq: NTAP) came in first in NAS revenue, with quarterly sales of $155 million, sequential growth of 15.8 percent, giving it a 37.2 percent market share (see NetApp Nets Plenty). IDC also identified NetApp as the leader in the young iSCSI market with a 44.6 percent share, although iSCSI SANs still make up less than 1 percent of the networked storage market. Overall, NetApp was fourth in networked storage with 8.6 percent of the market after leading all major vendors with 26.5 percent growth.

Interestingly, smaller storage vendors grew at even a greater pace than the big guys over the past year. Those in the “others” category accounted for 22.9 percent growth in networked storage revenue, including a 23.5 percent increase in NAS and a 22.7 percent bump in SAN revenue.

Table 1: Worldwide NAS Revenue

Table 2: Worldwide SAN Revenue

— Dave Raffo, Senior Editor, Byte and Switch0