IDC: EMC, Dell Overpower Storage Market In 2004

"We're capturing more of the growth in the market than any other vendor," said Tom Joyce, vice president of storage platforms marketing at EMC. "I believe that in the last year, EMC has captured about 73 percent of the market growth."

EMC is especially pleased it has taken back much of the market-share lead it lost to Hewlett-Packard when HP acquired Compaq, Joyce said. "We've been focused on this for a long time . . . to get to the point where we can take back that lead."

HP lost some ground to EMC, while IBM took a hit due to product transition issues.

Patrick Eitenbichler, director of HP StorageWorks marketing, said his company saw challenges in 2004 in the second half of the year, leading to a year-on-year decline in storage revenue.

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However, he said, the company is recovering and in the first quarter reported that storage revenue fell only 1 percent compared with the first quarter of 2004. "We are closing the gap every quarter," he said.

Storage is a cyclical business at HP, with the fourth quarter typically strong, followed by a weak first quarter, Eitenbichler said. "But this is the first time in history our first quarter beat our fourth quarter," he said. "It's moving in the right direction."

For IBM, a transition in products from its ESS 800 series of high-end arrays to its new DS 8000 series, along with the introduction of the DS 6000, accounted for a slowdown in the company's storage sales, said Denise Buonaiuto, vice president of Global Business Partner Sales in IBM's Systems and Technology Group.

"We are not happy with our performance in 2004," she said.

Things will be different in 2005, as IBM realigns its sales to focus on solutions, and not just on the cost-per-megabyte, Buonaiuto said. For instance, she said, the company recently introduced a number of solutions around the areas of business continuity, information simplification and information life-cycle management (ILM).

Also, she said, late 2004 saw the introduction of a whole new line of entry-level storage arrays, including the DS 300 and DS 400.

According to researcher IDC's Worldwide Quarterly Disk Storage Systems Tracker, released on Friday, overall storage growth for the fourth quarter of 2005 was fairly anemic, with worldwide external disk storage system revenue hitting $3.84 billion, up only 0.9 percent compared with $3.81 billion for the year-ago quarter.

EMC, however, had revenue of $844 million in this category, up 13.4 percent over the same quarter last year. Dell, the No. 5 vendor, saw its revenue hit $276 million, up 15.2 percent. Much of Dell's storage hardware sales comes from sales of EMC arrays. Together, the two accounted for almost 30 percent of the entire market.

HP came in at No. 2, with $745 million for the quarter, down 7.5 percent from last year. IBM's $504 million was down more than 20 percent from a year ago, when Hitachi saw its revenue fall 0.5 percent, according to IDC.

For the full year, revenue for the entire storage industry rose 4.7 percent to $14.2 billion. EMC was tops, with 2004 external disk storage systems revenue of $3 billion, up 18.4 percent. That was enough to propel EMC to the top position over HP, which saw its revenue for the year drop 6.3 percent to $2.6 billion.

No. 3 IBM saw its 2004 revenue fall 4.3 percent, while No. 6 Sun saw a 5.6 percent drop. But Hitachi's revenue rose 1.1 percent to $1.2 billion, and Dell plowed forward with an 18.7 percent increase to keep the No. 5 position.

HP did come out on top in terms of worldwide revenue for disk storage systems, which includes both networked and direct-attached storage. Worldwide sales in the fourth quarter were up 1.8 percent to $5.8 billion. But HP's revenue of $1.4 billion in the fourth quarter was down 1.5 percent from the previous year.

IBM, at No. 2, saw its disk storage systems revenue fall 8.7 percent to $1.3 billion for the quarter. Hitachi at No. 5 and Sun Microsystems at No. 6 both reported revenue declinesas well.

But not EMC and Dell. EMC's revenue of $844 million gave it a solid No. 3 spot, and was up 13.4 percent over last year, according to IDC. And Dell hit $425 for the No. 4 spot, up 15.8 percent.

Worldwide, HP continued to hold on to the top spot, with $4.9 billion in overall disk storage systems revenue, accounting for 23.6 percent of the total $20.9 billion spent. However, that figure was down 5.6 percent.

IBM, at No. 2, had a slight increase in revenue to $4.3 billion. However, EMC surged forward by 18.4 percent to hit $3 billion, followed by Dell, which was up 17.3 percent to $1.5 billion.

In terms of the worldwide NAS market, which in the fourth quart was up $14.7 percent to $380 million, Network Appliance kept its lead with an 18 percent growth in revenue to $161 million. EMC grew by 11.8 percent to hit No. 2 at $143 million. Together, the two accounted for 69.7 percent of the NAS market.

EMC's Joyce said that his company is executing well with Dell. "We continue to be pleased with our relationship with Dell and with the midrange market as well," he said.

A big part of EMC's growth came from ILM, which brings together a number of different products, Joyce said. "We want customers to buy [the products] and use them together," he said. "That's where they get the best value."