EMC consolidates at top as IBM closes on HP in storage

Stan Beer
Tuesday, 07 March 2006 14:40

Worldwide external controller-based (ECB) disk storage revenue experienced double digit growth, totaling US$14.7 billion in 2005, an 11.2% increase over 2004 revenue of US$13.2 billion, according to research group Gartner.

EMC consolidated its position as the clear market leader, while IBM narrowed the gap between it and Hewlett-Packard for the number two position in 2005. IBM's worldwide ECB market share increased to 14.5%, while HP's market share totaled 15.2%. EMC easily maintained its clear No 1 spot in 2005, despite a slight decline in 2005 market share compared to 2004. Network Appliance moved past Sun Microsystems to become the No 6 vendor, based on worldwide ECB revenue.

Dell experienced the strongest growth among the top-tier vendors, with 42.1% revenue growth in 2005 and 60.4% revenue in the fourth quarter of 2005. Dell's strong performance allowed it to move from the seventh position in worldwide revenue in 2004 to the fifth position in 2005.

Large vendors are controlling a larger portion of the industry. In 2005, the top 7 vendors accounted for 81.6% of worldwide ECB revenue, up from 77.8% of total sales in 2004.  In the fourth quarter of 2005, the top 7 vendor's market share totaled 83.5%, up from 75.8% market share in the fourth quarter of 2004.

'The increase in market share among the top 7 vendors in 2005 is due in part to increased consolidation, strategic alliances, and partnerships,' said Donna Taylor, principal analyst for Gartner's global Storage Quarterly Statistics program.

Hewlett Packard, fueled by a 13.7% revenue increase year-over-year in 2005, maintained the No. 2 position with an increase in market share in 2005.  Strong growth in HP's EVA mid-range storage arrays, as well as in its high-end XP-series helped drive revenue numbers for HP's storage business in 2005.

In the fourth quarter of 2005, some of the top-tier vendors had significant growth rates in revenue compared to the corresponding fourth quarter in 2004. Dell and IBM led the growth charge with overall increases in revenue of 60.4% and 49.7% respectively (see Table 2).

While Network Appliance did not match these increases, its 23.2% year-over-year quarterly growth, fueled by its FAS3000, resulted in the company moving ahead of Sun Microsystems as the No. 6 vendor in the fourth quarter of 2005.

Sun Microsystems experienced a revenue decline in 2005 year-over-year at -0.8%, while realizing a 9.1% revenue growth in the fourth quarter. The company saw its revenue mix shift towards its midrange and data center arrays. Sun's acquisition of StorageTek in the third quarter of 2005 had a positive impact on revenue overall for the company in the latter part of the year, which softened its overall annual revenue decline.