EMC Takes Top NAS Revenue Spot From Network Appliance, Thanks To Higher Prices

EMC Network Appliance

A new report by Gartner Dataquest finds that EMC took the No. 1 spot with a NAS revenue of $785.9 million in 2001, a 50 percent jump from the $524 million in revenue the company recorded in 2000.

As a result, EMC has 48.6 percent of the NAS market in terms of revenue, compared with a 35 percent share for Network Appliance, which in 2001 had NAS revenue of $565.8 million, according to the report.

However, in terms of Tbytes shipped, Network Appliance is still the leading vendor, according to Gartner Dataquest. The company shipped 9,734 Tbytes of NAS capacity in 2001, followed by Quantum with 5,866 Tbytes.

Quantum led the pack in numbers of NAS units sold, with 40,750 units in 2001. Maxtor came in second, with 14,990 units, followed by Dell and Network Appliance.

For EMC, all that matters is the revenue figure, which is the one most closely watched by Wall Street, a company spokesperson said.

The latest Gartner Dataquest report means EMC is now the leading vendor in terms of external RAID hardware, SAN hardware, storage management software and NAS, the spokesperson said. "NAS was the last brick in the wall," the spokesperson said.

The difference was price, said Pushan Rinnen, senior analyst with Gartner Dataquest.

EMC's main NAS business comes from its Celerra product line. Celerra is a NAS gateway, or head, meaning it does not have its own storage devices, but instead connects to storage capacity on the company's Symmetrix arrays. "EMC's product is so expensive," Rinnen said. "The Celerra and Symmetrix are sold at several hundreds of thousands of dollars per unit."

Most NAS vendors offer stand-alone units, in which the NAS appliance includes its own integrated storage capacity, said Rinnen.

EMC offers stand-alone NAS appliances under its Clariion brand name.

Both EMC and Network Appliance offer well-designed products, Rinnen said. However, Network Appliance suffered from the bursting of the dot-com bubble, she said.

The overall NAS market rose about 12 percent in terms of revenue during 2001, with revenue last year reaching $1.6 billion, the Gartner Dataquest report said.

How well the NAS market, and EMC, does in 2002 depends on corporate budgets, said Rinnen. "Celerra is expensive," she said. "With tight budgets, sales could be affected. At the same time, NAS gateway products could affect the high-end stand-alone NAS markets. When customers have a SAN, or plan to install a SAN, it is a natural fit to use a NAS gateway. Server vendors like IBM and HP will focus on NAS heads in the future. [Such products play well with their SAN strategies."

Hope Hayes, president of Alliance Technology Group, a Hanover, Md.-based EMC solution provider, said she is not surprised EMC did so well in 2001 in the NAS space. "EMC has really been focused on the NAS space," Hayes said.

EMC offers both the Celerra NAS head and the Clariion stand-alone NAS products, giving it the range to work with any client's requirements, said Hayes. "One nice thing about EMC - they do everything from the mainframe down," she said. "They focus on smaller clients that can grow. Not just on disks, but on the whole storage philosophy, including such things as disaster recovery. And that helps our sales."