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Storage spending continues to decline

According to research from IDC, the global disk storage systems factory revenue fell 3% between the second and third quarters of 2002 to US$4.7 billion.

The disk storage systems market is still suffering due to the slow down in IT spending, says a new report. According to research from IDC, the global disk storage systems factory revenue fell 3% between the second and third quarters of 2002 to US$4.7 billion.

The total external storage market, including both network-based stroage and external direct attached storage, declined 5% sequentially to US$3.2 billion in the third quarter

Overall, HP maintains its total storage revenue leadership with 27% share, followed by IBM with 20% share. Hitachi, LTD and IBM had the strongest sequential quarterly revenue growth with 23% and 7% respectively.

“The failure to gain revenue momentum in Q3 is yet another indication that a rebound in the disk storage systems market is not imminent,” says Charlotte Rancourt, research director of IDC’s Disk Storage Systems program.

“The third quarter is consistent with an emerging trend whereby growth in gigabyte per unit does not offset the unrelenting decline in dollar per gigabyte,” he adds.

The network-attached storage (NAS) and open storage area network (SAN) storage market declined more in revenue than the overall market, 10% and 6% sequentially. Competition continues to be fierce, resulting in a number of market leadership changes.

Network Appliance took the lead in the NAS storage market with 38% revenue share, while EMC, the leader for the past several quarters, fell to the number 2 position this quarter with 31% share. In the open SAN storage market, HP edged out EMC for the number 1 position with 30% revenue share, while EMC followed with 27% share.

EMC continues to hold its leadership in the total network storage market (NAS combined with Open SAN) with 28% revenue share.

“Customers took advantage of the scalability of installed SAN and NAS solutions to increase capacity at lower cost,” comments John McArthur, group vice president of Storage Research at IDC.

“The declining revenue picture can sometimes be misleading. The trend towards networked storage continues, which means that suppliers have to look beyond revenue to see that capacity growth of networked storage exceeds the growth of direct-attached storage," he adds.

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