Gartner Says Worldwide External Controller-Based Disk Storage Market Revenue Grew 16 Per Cent in the Third Quarter of 2010

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Worldwide external controller-based (ECB) disk storage revenue reached $4.6 billion in the third quarter of 2010, up 16 per cent from nearly $4 billion in the third quarter of 2009, according to Gartner, Inc.

While the ECB disk storage market declined in 2009, these 2010 results are also an increase from 2008. Third quarter 2010 worldwide ECB disk storage revenue was up 8.4 per cent over the third quarter of 2008 revenue of $4.3 billion.

Except for the Europe, the Middle East and Africa (EMEA) region, which is suffering significant economic woes, the other major geographic regions grew by double-digits year-on-year. The Latin America market grew 43.4 per cent, Asia/Pacific increased 22.2 per cent, Japan was up 18 per cent, and North America grew 17.2 per cent. Terabytes shipped in the third quarter of 2010 increased 60.4 per cent over the third quarter of 2009, while price per terabyte decreased 28 per cent.

"In spite of an erratic global economy, and even though IT budgets remain tight, IT executives continue to invest in ECB disk storage to support projects that yield economic efficiencies," said Roger Cox, research vice president at Gartner. "Significant investment examples include shared ECB disk storage support for virtualised server and desktop deployments, disk-based backup and recovery modernisation initiatives, as well as new disk-based active archiving projects. General-purpose ECB disk storage infrastructures are also being refreshed to take advantage of new technologies that simplify storage management, reduce operational costs, improve utilisation and satisfy expanding service level agreements (SLAs)."

EMC, Fujitsu and NetApp were the only top-tier vendors that were able to grow more than the ECB market in year-on-year revenue growth, with each gaining market share (see Table 1). Gaining 2.8 percentage points in market share, NetApp's storage efficiency message is resonating with end-users faced with budget and data centre space constraints. EMC's broad-based ECB disk storage portfolio supports its market share gains, with V-Max continuing to produce strong year-on-year revenue results.

As evidenced by network attached storage's 42.7 per cent year-on-year growth in the third quarter of 2010, users continue to show a growing preference for modular ECB disk storage systems rather than the more-costly monolithic frame-based disk storage systems. While EMC and Fujitsu produced year-on-year revenue gains in the third quarter of 2010, the monolithic frame-based disk storage market declined to 24.5 per cent of the total ECB disk storage market.

HP's market share loss was due to its anemic position in the fast-growing NAS segment coupled with ongoing EVA year-on-year revenue declines.

While essentially holding its position in the modular ECB segment Oracle's market share decline was due to the discontinuance of the reseller relationship with HDS for the high-end monolithic frame-based 9000 series.

Despite a 47.9 per cent year-on-year revenue gain with its EqualLogic PS-series, Dell did not improve its market share position because of continued declines in Dell/EMC co-branded products.

Even though the IBM XIV Storage System attained a 112 per cent year-on-year increase in the third quarter of 2010, IBM's spotty performance with its DS-series resulted in a modest decline in market share.

Hitachi/Hitachi Data Systems third quarter results remained constrained due to the transition from the older USP-V and USP-VM systems to the just released VSP high-end monolithic frame-based disk array system. Fujitsu's strength stemmed from robust sales of the high-end ETERNUS DX8000 series in Japan.

In EMEA, external controller-based storage revenue in the third quarter of 2010 totalled $1.33 billion, marking a return to 2008 levels for this market. The EMEA ECB market accounted for 29 per cent of worldwide ECB revenue in the third quarter of 2010, 2 per cent down from the same period in 2009.

Of the top eight vendors, EMC, NetApp and Fujitsu were the only vendors to show a double-digit revenue growth in the third quarter of 2010. EMC maintained the No. 1 position and increased its market share by 3.4 percentage points to reach 26.9 per cent market share. Although IBM's market share dropped slightly in the third quarter of 2010, the company maintained its second position with revenue of $202 million. "HP is now almost level with IBM in terms of revenue, and would have displaced IBM if it had not recorded a 15 per cent year-on-year revenue decline of its EVA series product," said Sid Deshpande, senior research analyst at Gartner.

In the third quarter of 2010, NetApp showed a growth of 28.2 per cent and in terms of revenue is fast closing the gap with HP and IBM, its nearest competitors. Netapp's strong performance was driven by a 63 per cent growth in its FAS 2000 series and 85 per cent growth in its V series product lines. Hitachi Data Systems was the only vendor to show a decline of 6.3 per cent year-on-year, largely due to the release of the virtual storage platform and slow growth of its older USP-V and USP-VM platforms. Although Fujitsu continues to be a relatively small player in the market, accounting for 2.3 per cent market share in the third quarter of 2010, it grew 60 per cent recording the highest revenue growth this quarter. Fujitsu's Eternus series of storage subsystems, launched in the fourth quarter of 2009, generated $26.5 million in revenue this quarter and drove the vendor's year-on-year revenue growth.

Gartner ECB disk storage reports reflect hardware only revenue, as well as hardware revenue associated with financial leases and managed services. Optional and separately priced storage software revenue and storage area network infrastructure components are excluded.

Additional information on the ECB disk storage market is available in the Gartner "Quarterly Statistics: Disk Array Storage, All Regions, All Countries, 3Q10 Update". The report includes vendor market share by data access method, price band, sales channel and operating system segmentation. The report is available on Gartner's website at
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