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EMC growth outpaces storage market

Boosted by midrange products, company's revenue grew 12.2 percent, according to new figures for the first quarter of 2005.

Boosted by its midrange products, EMC extended its lead in the storage system market, according to new figures for the first quarter of 2005.

In worldwide revenue for standalone storage systems, EMC's revenue grew 12.2 percent to $808 million, market researcher IDC plans to announce Friday. The overall market growth accelerated to 6.7 percent, reaching to $3.7 billion.

EMC's growth--mirroring that of the overall market--was driven by its midrange systems, said IDC analyst Bart Nisbet. "EMC had a great quarter around their Clariion product," he said, though the company's high-end Symmetrix line was flat.

The overall market is drawn toward midrange systems, which now incorporate features formerly found only in high-end lines and which generally employ a modular approach that makes them easier to expand, Nisbet said.

Storage systems garner less attention than servers and many other parts of corporate computing, but the products are significant as companies struggle to keep up with burgeoning data and with new regulations requiring strict controls over what is stored. Sun Microsystems on Thursday highlighted that concern, laying out nearly half its cash in a $4.1 billion deal to acquire StorageTek.

Second in the market was Hewlett-Packard, which saw revenue grow 6.2 percent to $668 million but which lost share. Next in line: IBM grew 9.2 percent to $435 million, Hitachi grew 1.9 percent to $345 million, Dell grew 29.2 percent to $291 million, Network Appliance grew 29.7 percent to $213 million, and Sun shrank 16.1 percent to $190 million.

IBM "struggled a bit in the United States," Nisbet said, with delays shipping the new high-end DS6000 and DS8000 products.

Sun and HP sell Hitachi's high-end product under their own brands, but both those companies were held back by the transition to the new Tagmastore line, Nisbet said. Sun also said that its first-quarter storage revenue was hurt by slow sales of its high-end servers.

Overall, sales of high-end storage systems--those costing more than $300,000--declined 9 percent, Nisbet said. Midrange systems, with prices between $50,000 and $300,000, had a revenue increase of 27 percent.

Until this decade, most storage systems were directly attached to servers. However, the percentage has been declining, and now only a third of revenue comes from direct-attached storage, Nisbet said.

Instead, customers are using storage systems that attach over a network and can be shared by many servers. There are two general approaches: higher-end storage area networks, or SANs, and generally less expensive network-attached storage--NAS.

About 48 percent of storage revenue comes from SANs using the traditional Fibre Channel network technology, but a fast-growing alternative, with 1.3 percent of revenue, comes from SANs built with iSCSI technology that piggybacks on mainstream networks.

NAS accounted for a further 13 percent of the market, and the remaining 5 percent is for mainframe networking technology.