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Storage Hardware Sales Drop: Report

The falling economy is taking its toll on the storage hardware business, with sales in the fourth quarter declining compared with sales a year ago, according to a research report.

That, according to IDC, marks the first time in five years that storage sales have dropped on a year-over-year basis.

The gloomy overview of the storage hardware industry was released by IDC on Friday in its "IDC Worldwide Disk Storage Systems Quarterly Tracker."

IDC breaks the storage hardware market into two broad categories. The external disk storage system segment includes only storage systems sold independently of a server, while the total disk storage systems segment also includes disk storage sold as part of a server.

Total worldwide external disk storage systems revenue was $5.3 billion in the fourth quarter, down 0.5 percent compared to the $5.4 billion sold in the fourth quarter of 2007, IDC said.

Of the top seven vendors, EMC, Hewlett-Packard, Dell and Hitachi all saw growth over last year of between 3.4 percent and 10.0 percent, while IBM, NetApp and Sun Microsystems saw declines of between 5.4 percent and 11.3 percent, IDC said.

EMC remained the leading vendor, with sales of $1.24 billion, up 3.4 percent from the $1.20 billion it sold last year. IBM retained its No. 2 position despite an 11.3 percent drop in sales to $838 million.

Rounding out the top seven were HP with sales of $691 million, Dell with $493 million, Hitachi with $413 million, NetApp with $374 million and Sun with $275 million.

For storage vendors that also count among the top server vendors, the severe drop in server sales in the fourth quarter of 2008 seems to have had an impact on their total storage sales as well.

IDC reported last month that fourth-quarter 2008 server sales declined 14 percent over the same period last year to $13.5 billion, making it the second quarter in a row to experience year-to-year declines.

Of the top seven storage vendors, HP, IBM, Dell and Sun are also the top server vendors.

In the fourth quarter, HP's total storage sales, including external storage and server-attached storage, dropped 1.5 percent, compared to a drop of 22.7 percent for IBM, 3.2 percent for Dell and 1.5 percent for Sun. Hitachi, a relatively minor player in the storage market compared to the other four, actually saw its total storage sales rise 4.2 percent.

Overall, HP led the total disk storage systems market with sales of $1.4 billion during the fourth quarter, followed by IBM with sales of $1.3 billion.

Rounding out the top seven were EMC with sales of $1.2 billion, Dell with $795 million, Hitachi with $424 million, Sun with $419 million and NetApp with $374 million.

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