IDC: Dell, IBM Lap Up Share

IBM Corp. (NYSE: IBM) and Dell Computer Corp. (Nasdaq: DELL) posted the strongest year-over-year gains in the overall disk storage systems market, according to IDC's latest quarterly report on the sector.

And even though EMC Corp. (NYSE: EMC) showed a year-over-year decline in sales, the company maintained its "leadership position" in the storage networking market, IDC says.

Overall, disk storage systems revenues were $4.73 billion in the second quarter of 2003, down 3.9 percent compared with the second quarter of 2002, according to the IDC report. Storage capacity continues to outpace revenue, growing 36 percent year-over-year, to 181.6 petabytes shipped in the second quarter (see IDC: Q2 Storage Sales Down Y/Y).

Dell showed the strongest year-over-year growth in the category, generating $334 million in revenues in the quarter, an increase of 21.7 percent over the same period last year. John McArthur, group VP of storage research at IDC, says Dell was helped by healthy server sales as well as its partnership with EMC for the midrange Clariion line.

IBM, meanwhile, picked up 2.5 points of market share with sales of $957 million in the quarter -- a gain of 10.2 percent over last year. Big Blue also held the second-place spot overall, after Hewlett-Packard Co. (NYSE: HPQ), which remained in the No. 1 position. EMC was third overall, posting a decline in sales of 6.9 percent compared with the second quarter of 2002, according to IDC.That said, EMC led the total external RAID market -- with 21 percent revenue share -- followed by HP with 20 percent revenue share. EMC also maintained its leadership in the total network storage market, which includes SAN-attached storage and NAS, with 27.5 percent revenue share, followed by HP and IBM with 24.5 percent and 11.4 percent revenue shares, respectively. In the NAS market, EMC and Network Appliance Inc. (Nasdaq: NTAP) tied for first place, with each capturing 37 percent market share.

Table 1: Top 5 Vendors, Worldwide Disk Storage Systems Factory Revenue, Second Quarter 2003 (Revenues in Millions)

McArthur notes that IDC's data shows strong quarter-over-quarter growth in North America but weakness in other markets, particularly Japan. In addition, he says, "for people who were hoping to grow their business by expanding their international business, the [U.S.] dollar is working against them."

Still, there are hints at a sign of a rebound in the storage market in the U.S. and Canada. In comments at an investor conference yesterday, EMC CEO Joe Tucci said he expected to see a slow, but broad-based, recovery in the IT market (see EMC CEO Sees Slow Turnaround).

From a North America perspective, McArthur says, that's true. But he cautions about predicting a timeframe for any broad recovery. "Storage seems to be a trailing indicator," he says. "Storage didnt fall when everything else fell -- it fell a little later."McArthur also says IDC's quarterly numbers show that pricing declines did not help to spur sales. "It's not an elastic market," he says. "You can drop prices all you want, but customers aren't going to buy storage they don't need."

— Todd Spangler, US Editor, Byte and Switch