External Disk Storage Systems Market Delivers Double Digit Annual Growth

Worldwide external disk storage systems factory revenues grew $708 million in the fourth quarter of 2005 (4Q05), posting 17.9% growth from a year ago to $4.7 billion, according to IDC's Worldwide Disk Storage Systems Quarterly Tracker. For the quarter, the total disk storage systems market grew to $6.8 billion up 13.1% from the prior year's fourth quarter. Total disk storage systems capacity shipped reached 653 petabytes, growing 54.6%. "The external disk storage systems market growth continued to accelerate through the year," said Brad Nisbet, program manager, IDC Storage Systems. "Data growth was one driver, but the availability of affordable systems that support multiple tiers of storage to address data protection, business continuity requirements, and online, active archives also contributed." Total External Disk Storage Systems EMC maintained its lead in the external disk storage systems market with 20.6% revenue share, followed by HP and IBM with 18.0% and 15.9% revenue share, respectively. Dell and Hitachi rounded out the top 5 with 9.2% and 7.3%, respectively. Among the top 5 suppliers, Dell and IBM posted the strongest year-over-year revenue growth during 4Q05, with 54.2% and 46.8% growth, respectively. Network Disk Storage Systems The total network disk storage market (NAS Combined with Open and iSCSI SAN) posted 24.2% year-over-year growth in the fourth quarter to more than $3.1 billion. EMC continues to maintain its leadership in the total network storage market with 26.9% revenue share, followed by HP and IBM with 19.7% and 13.6% revenue share, respectively. Dell and IBM posted the strongest year-over-year revenue growth for the quarter, with 64.6% and 54.9% growth, respectively. While IBM's strong year-over-year growth was due in part to an easy comparison with an unusually weak fourth quarter in 2004, the company achieved its highest quarterly revenue in four years. In the NAS market, which grew 23.3% year over year, EMC led with 39.5% revenue share, followed by NetApp with 31.8% share. The iSCSI SAN market continues to show strong momentum, posting 130.0% revenue growth compared to the prior year's quarter reaching $94 million. Network Appliance continues to lead the market with 26.2% share, followed by EMC with 20.6% share. "The sweet spot in the market during 2005 was systems priced between $50,000 and $149,999," said Natalya Yezhkova, senior research analyst, IDC Storage Systems. "This segment, which serves the needs of a broad range of data centers and applications, grew to over $1 billion in the fourth quarter." Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, Fourth Quarter 2005 (Revenues are in Millions) Vendor 4Q05 Market 4Q04 Market Revenue Revenue Share Revenue Share Growth 4Q05/4Q04 -------------------------- -------- ------ -------- ------ ---------- EMC $962 20.6% $863 21.8% 11.6% HP $838 18.0% $745 18.8% 12.4% IBM $743 15.9% $506 12.8% 46.8% Dell $428 9.2% $278 7.0% 54.2% Hitachi $340 7.3% $322 8.1% 5.6% Others $1,352 29.0% $1,242 31.4% 8.9% All Vendors $4,664 100.0% $3,955 100.0% 17.9% Source: IDC, March 1, 2006 Full Year Results for Disk Storage Systems Market For the full year, EMC maintained its lead in the external disk storage systems market with 20.7% revenue share, followed by HP and IBM with 18.3% and 13.6% revenue share, respectively. Dell and Hitachi rounded out the top 5 with 8.4% and 8.0%, respectively. Among the top 5 suppliers, Dell and IBM posted the strongest year-over-year revenue growth during 2005, with 36.5% and 23.8% growth, respectively. For the full year, the total disk storage systems market posted 10.7% growth to $23.7 billion. In the total worldwide disk storage systems market, HP lead the market with 23.1% followed by IBM with 20.3% revenue share respectively. EMC maintained the third position with 14.2% revenue share. Dell and IBM posted the largest year-over-year revenue growth among the top 5 vendors during the quarter, with 29.9% and 12.0% growth respectively. Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, Full Year 2005 (Revenues are in Millions) Vendor 2005 Market 2004 Market Revenue Revenue Share Revenue Share Growth 2005/2004 -------------------------- -------- ------ -------- ------ ---------- EMC $3,364 20.7% $3,054 21.1% 10.2% HP $2,965 18.3% $2,649 18.3% 11.9% IBM $2,206 13.6% $1,782 12.3% 23.8% Dell $1,358 8.4% $995 6.9% 36.5% Hitachi $1,297 8.0% $1,243 8.6% 4.3% Others $5,054 31.1% $4,769 32.9% 6.0% All Vendors $16,245 100.0% $14,492 100.0% 12.1% Source: IDC, March 1, 2006 Taxonomy Notes: IDC defines a Disk Storage System as a set of storage elements, including controllers, cables, and (in some instances) host bus adapters, associated with three or more disks. A system may be located outside of or within a server cabinet and the average cost of the disk storage systems does not include infrastructure storage hardware (i.e. switches) and non-bundled storage software. The information in this quantitative study is based on a branded view of the disk storage systems sale. Revenue associated with the products to the end user is attributed to the seller (brand) of the product, not the manufacturer. Original equipment manufacturer (OEM) sales are not included in this study. In this study, Hitachi Data Systems (HDS) sales do not reflect their OEM sales to Sun Microsystems and Hewlett-Packard. IDC's Worldwide Disk Storage Systems Quarterly Tracker is a quantitative tool for analyzing the global disk storage market on a quarterly basis. The Tracker includes quarterly shipments and revenues (both customer and factory), Terabytes, $/Gigabyte, Gigabyte/Unit, and Average Selling Value. Each criteria can be segmented by location, installation base, operating system, vendor, family, model, and region. For more information about IDC's Worldwide Disk Storage Systems Quarterly Tracker, please contact Hoang Nguyen at 508-935-4718 or hnguyen@idc.com.