External Disk Storage Market Dodges Recession Effects

By Chris Preimesberger  |  Posted 2008-12-05 Print this article Print

Researcher IDC reports that third-quarter factory revenues posted solid growth of 8.8 percent year over year, totaling $4.9 billion in the quarter. The total disk storage systems market grew to $6.6 billion in revenues, up 1.1 percent from the same period a year ago. Total disk storage systems capacity shipped reached 2,170 petabytes-whopping growth of 41.7 percent.

Zigzagging Wall Street numbers may be giving investors indigestion, the mortgage and credit card markets may be in tatters, and the auto industry may be on the verge of collapse. But the IT disk storage market keeps chugging along well into the black as if the macroeconomy were just fine.

Researcher IDC reported Dec. 5 in its Q3 2008 Worldwide Disk Storage Systems Quarterly Tracker that factory revenues posted solid growth of 8.8 percent year over year, totaling $4.9 billion in the quarter.

In the three-month period from July 1 to Sept. 30, the total disk storage systems market grew to $6.6 billion in revenues, up 1.1 percent from the same period a year ago. Total disk storage systems capacity shipped reached 2,170 petabytes-which represents whopping growth of 41.7 percent year over year.

EMC kept the lead it has had for more than three years in the external disk storage systems market with 23.0 percent revenue share in the third quarter. IBM and Hewlett-Packard were second and third, respectively, with 12.7 percent and 12.5 percent shares.

Dell was fourth with 9.1 percent, and NetApp and Hitachi Data Systems finished fifth and sixth with 8.2 percent and 8.0 percent revenue shares, respectively.

Among the top five disk storage suppliers, EMC and NetApp posted the highest year-over-year revenue growth during 2Q08, with 16.2 percent and 13.8 percent growth, respectively. EMC's revenue growth rate was up about 3 percent from last quarter alone and has now posted 21 consecutive double-digit growth quarters.

Analysts: Disk Storage Growth Not Slowing Down

IT analysts are in agreement that disk storage purchasing isn't going to slow down anytime soon, largely because the total volume of data is increasing at a 50 to 70 percent yearly rate.

"We expect that the storage sector, particularly external storage, will continue doing well compared to other segments of the market," Natalya Yezhkova, research manager in storage systems at IDC, told me.

"There are strong drivers for the market growth; besides all the usual suspects [e-mail, databases, files, etc.], there are growing segments of data protection, data archive and fixed content [videos, digital photos, etc.] that will continue boosting demand for storage capacity."

IDC's surveys have indicated that storage is one of the last categories in which end users will cut spending as needed, Yezhkova said.

"The only caveat to this: Users might start to invest more-not just in raw capacity, but on tools that would help to maximize storage utilization [e.g., thin provisioning, data deduplication and storage virtualization]," Yezhkova said.

However, Yezhkova said that "at the same time, current market conditions and tightening budgets are leading to longer purchasing cycles for storage systems and to the adoption of technologies designed to optimize storage utilization and/or reduce total cost of ownership."

Other Elements of the Q3 Report

IDC also said that the open-standards SAN (storage-area network) market grew a healthy 14 percent year over year, with segment leader EMC taking an even 25 percent revenue share. Next was HP with 14.7 percent.

The NAS (network-attached storage) market grew 19.7 percent, led again by EMC with 37.7 percent revenue share and followed by NetApp with 28.2 percent share.

Virtualization continues to drive sales of new disk storage. Thus, the iSCSI SAN market continues to show strong momentum, posting a huge 96.7 percent revenue growth compared with the 2007 quarter. Dell is the leader in that market with 31.1 percent revenue share, followed by EMC and NetApp, with 13.3 percent and 12.5 percent share, respectively.

"The midrange market [systems in the $15,000-$299,999 price range] was particularly strong in the third quarter, growing 15 percent year over year," said IDC storage research analyst Liz Conner, who handled the research along with Yezhkova.

"IP storage played a major part in this growth fueled by the strong adoption of iSCSI SANs, specifically within virtualized server environments, as well as solid growth in NAS-based solutions, addressing the ever-increasing growth in file-level data."

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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