Storage Market Shows Healthy Growth

Worldwide factory revenues from external disk-storage systems increased by 8 percent in the second quarter, due to broad demand for networked storage, a market research firm said Friday.

The total disk-storage systems market was up 5 percent in the quarter to $5 billion from $4.77 billion in the same period a year ago, International Data Corp. said. It was the fourth consecutive quarter of year-over-year revenue growth.

Sales of external disk-storage systems increased to $3.5 billion in the quarter from $3.2 billion a year ago, reflecting the continuous increase in corporate usage of network storage over direct storage, IDC analyst Natalya Yezhova said.

Among the top 5 vendors in the growing external storage market, leader EMC Corp. outpaced the pack with revenue growth of 19.5 percent.

While not among the leading five vendors, Dell Inc. and Network Appliance Inc. posted higher revenue growth from external storage, 25 percent and 26.5 percent, respectively.EMC's focus on technology for information lifecycle management, and its strong marketing strategy were responsible for higher sales. Network Appliance, which also executed well, grew from a much smaller revenue base, Yezhova said.

Dell, on the other hand, benefited from its reseller agreement with EMC. Dell resells EMC systems for the small and midsize business market.

Despite their small market share, Dell and Network Appliance are expected to continue to do well, Yezhova said.

"I would expect Dell and Network Appliance to continue to grow, but I can't say whether they'll continue to grow at the same rate," Yezhova said.

Market share for the leading vendors in the external storage market, in order, was EMC, 20.7 percent; Hewlett-Packard Co., 18.2 percent; IBM, 13.5 percent; Sun Microsystems Inc., 8.1 percent; and Hitachi Ltd., 8.1 percent.HP led the pack in the total worldwide disk storage systems market, despite dropping 3.5 percent in market share to 23 percent. The remaining top 5 vendors were IBM with a 20.3 percent share; EMC, 14.4 percent; Sun, 7.6 percent; and Dell, 7.3 percent.