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Disk storage growing, but buyers in charge

Market researcher Gartner says sales of a key class of data storage gear rose 8.5 percent in the first quarter, with EMC, Dell and Network Appliance charging forward.

Sales of a key class of storage hardware are growing, but stiff competition among suppliers is putting customers in the driver's seat, according to a report Thursday from market researcher Gartner.

Worldwide sales of so-called redundant arrays of independent disks (RAID), a type of external storage, hit $3.1 billion in the first quarter of 2004, up 8.5 percent from the same period last year, Gartner estimated. RAID setups are designed to prevent data loss when a disk drive fails.

The storage products covered are also 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 businesses to hold data for mainframe computers or groups of servers.

Demand for storage gear is being driven by factors such as new government rules for data handling. In addition, Gartner said, the global economy is generally improving, and there is "growing evidence that capital budgets for expanded (information technology) investments are increasing."

Although businesses are spending more for greater storage capacity, they have many alternatives to choose from, according to report author Roger Cox. He also said storage vendors are "aggressively pursuing" deals. "The external controller-based disk storage market is, in reality, a buyer's market," Cox said in the report.

Gartner ranked storage specialist EMC as tops in the external, controller-based RAID arena in the first quarter, with $736 million in sales and a 23.6 percent market share. HP was second, with $530 million in sales and 17 percent market share. They were followed by IBM with 10.4 percent, Hitachi with 9.8 percent, Sun Microsystems with 6.5 percent, Dell with 5.5 percent, and Network Appliance with 5.4 percent.

Of these companies, NetApp saw its revenue grow fastest, followed by Dell and EMC. IBM, Hitachi and Sun suffered declines in revenue, according to Gartner.

Dell has a partnership with EMC to make and sell storage equipment. Gartner's numbers for EMC do not take into account revenue earned from machines that Dell resold. Similarly, Sun and HP resell equipment from Hitachi. Gartner's numbers for Hitachi do not reflect revenue from those arrangements.