Gartner said Thursday that worldwide sales of a kind of external disk storage hit $12.9 billion last year, up from $12.2 billion in 2002. Gartner's figures refer to so-called redundant arrays of independent disks (RAID), machines that are set up to avoid data loss if a disk drive fails.
The storage products covered also are run by their own controller device and are separate from server computers. This type of storage equipment, sold by companies such as EMC, Hewlett-Packard and IBM, is often used at larger companies to hold data for mainframe computers or groups of servers.
On Friday, market researcher IDC offered an upbeat note as well in its figures for the fourth quarter of 2003. Worldwide revenue for external disk storage systems grew 8.4 percent year over year to $3.7 billion for the three-month period, the largest quarterly gain since the economic downturn began, IDC said.
IDC's numbers include RAID gear as well as other storage systems.
An improving sales outlook isn't the only good news for storage gear companies. Last year, the price per megabyte of storage equipment fell by about 30 percent to 35 percent, compared to declines of 40 percent to 50 percent in previous years, according to Gartner analyst Roger Cox. "Price declines have moderated," he said.
In general, a healthier economy in a number of countries and new government regulations, primarily in the United States, are fueling increased demand for storage devices, Cox said. A number of storage companies havesuch as the Sarbanes-Oxley Act and the .
In a recent study by investment firm Credit Suisse First Boston, about 77 percent of the chief information officers it surveyed indicated some level of increased information technology spending in 2004 as a result of regulatory requirements. Data backup and recovery was the most frequently cited area of increased spending.
The top five
According to Gartner, the top five market leaders in external, controller-based disk storage kept their spots in 2003. EMC ranked first, with 20.6 percent market share; followed by HP, with 18.6 percent; IBM with 13.1 percent; Hitachi with 8.3 percent; and Sun Microsystems with 6.8 percent. While EMC and HP increased their market shares, IBM, Hitachi and Sun saw their positions slip.
Dell ranked sixth in market share last year, with a 4.9 percent market share. But the company's revenue grew at a torrid pace of 44 percent during the year, to $634 million. Dell has a. Cox foresees even more growth: "They have a lot of headroom," he said.
Network Appliance ranked seventh, with 4.5 percent market share. Its revenue grew 14 percent to $586 million.
For the fourth quarter, IDC ranked HP slightly ahead of EMC at the top of the standings, with nearly 22 percent of the market for HP and an even 20 percent for EMC. IBM and Hitachi were in third and fourth place, respectively, and Dell edged out Sun for the fifth spot.
In both the Gartner and IDC studies, the numbers for EMC do not take into account revenue earned from machines that Dell resold. Similarly, Sun and HP resell equipment from Hitachi. IDC's and Gartner's numbers for Hitachi do not reflect revenue from those arrangements.
Although Hitachi's market share slipped from 10.6 percent to 8.3 percent, Cox said the loss does not necessarily indicate general weakness at the company. "It's more a reflection of Japan having a troubled market," he said.
Hitachi sells its storage gear under the Hitachi name in Japan and under the Hitachi Data Systems brand in all other countries.
IBM's market share fell from 13.6 percent in 2002, according to Gartner. Cox said the company's midrange FastT storage devices have been selling well but that its high-end "Shark" products fell behind EMC's rival Symmetrix DMX products technologically.
IBM took issue with Cox's comment. "It's impossible to know the performance of DMX, as EMC does not participate in industry benchmarks," Tom Hawk, IBM's general manager for enterprise storage, said in a statement. "You'll continue to see IBM drive performance and new solutions in 2004."
EMC, for its part, argues that industry tests for high-end storage machines are not representative of real-world performance. "The only valid performance comparisons are those that are completed within the customer's environment," EMC spokesman Dave Farmer said.
In any event, Cox expects better performance from IBM's Shark soon.
"I'm sure IBM will make a comeback here in a short period of time," Cox said.