Gartner Says Worldwide External Controller-Based Disk Storage Market Grew 4.1% in 2006

STAMFORD, Conn., March 6, 2007 — Worldwide external controller-based (ECB) disk storage revenue totaled $15.2 billion in 2006, a 4.1 percent increase over 2005 revenue of $14.6 billion, according to Gartner, Inc.

IBM overtook Hewlett-Packard for the No. 2 position in 2006 (see Table 1). IBM’s worldwide ECB market share increased to 15.8 percent, while HP’s market share dropped to 13.1 percent. EMC maintained the No. 1 spot in 2006, as well as increasing its market share to 24.8 percent in 2006 compared with 23.4 percent in 2005. Hitachi/HDS maintained its No. 4 position with a market share of 9.5 percent. Dell and Network Appliance were No. 5 and 6 with 7.6 and 7.2 percent of the market, respectively. Sun Microsystems rounded out the top vendors in the No. 7 spot, finishing the year with a 6.1 percent market share.

Large vendors increasingly control a larger portion of the industry as consolidation continues, and effective marketing and channel partnerships strengthen their relative positions in the market. In 2006, the top seven vendors accounted for 84.2 percent of worldwide ECB revenue, up from 81.5 percent of total sales in 2005. In the fourth quarter of 2006, the top seven vendor’s market share totaled 85.2 percent, up from an 83.6 percent market share in the fourth quarter of 2005.

“Inorganic growth via vendor acquisitions was a hallmark of storage activity in 2006,” said Donna Taylor, principal analyst for Gartner’s global Storage Quarterly Statistics program. “Private equity investment in the storage industry also offered alternative financing with which to fund them.”

Table 1
Worldwide External Controller-Based Disk Storage Vendor Revenue Estimates for 2006
(Millions of U.S. Dollars)

Company	2006 Revenue	2006 Market Share (%)	2005 Revenue	2005 Market Share (%)	2005-2006 Change (%)
EMC *	3,775.0	24.8	3,418.5	23.4	10.4
IBM	2,398.5	15.8	2,118.7	14.5	13.2
Hewlett-Packard	1,984.9	13.1	2,150.4	14.7	-7.7
Hitachi/HDS **	1,464.4	9.6	1,393.1	9.5	5.1
Dell ***	1,158.5	7.6	1,119.1	7.7	3.5
Network Appliance	1,098.5	7.2	902.2	6.2	21.7
Sun Microsystems	929.7	6.1	826.9	5.7	12.5
Others	2,399.5	15.8	2,687.0	18.4	-10.7
Total	15,209.0	100.0	14,615.8	100.0	4.1

Note* EMC revenue excludes OEM revenue from Dell and Fujitsu Siemens.
Note ** Hitachi/HDS revenue excludes OEM revenue from HP and Sun Microsystems.
Note *** Dell estimates were modeled based on prior quarters due to data publication prior to Earnings Announcement.
Source: Gartner Dataquest (March 2007)

Network Appliance experienced the strongest growth among the top-tier vendors, with 21.7 percent revenue growth in 2006 and 19.7 percent revenue growth in the fourth quarter of 2006. Network Appliance is within striking distance of its closest competitor, Dell, whose year-over-year revenue growth was only 3.5 percent.

In the fourth quarter of 2006, Network Appliance experienced the greatest revenue growth at 19.7 percent year over year, while IBM grew its revenue by 17.3 percent during the same period (see Table 2). Hewlett Packard, however, experienced the greatest revenue decline, dropping 12.5 percent.

Hitachi/HDS overtook the No. 4 position from Dell in the fourth quarter of 2006 compared with one year ago. Hitachi/HDS gained a percentage point due to the success of its TagmaStore products. While Dell lost 1.3 percentage points, NetApp’s 19.7 percent revenue growth was enough to gain almost one percentage point.

IBM gained market share of 2.2 percent to finish the year at 19.4 percent. Strong sales in its NAS and midrange products contributed to IBM’s revenue growth of 17.3 percent year over year.

Table 2
Worldwide External Controller-Based Disk Storage Vendor Revenue Estimates for 4Q06
(Millions of U.S. Dollars)

Company	4Q06 Revenue	4Q06 Market Share (%)	4Q05 Revenue	4Q05 Market Share (%)	4Q05-4Q06 Change (%)
EMC *	1046.5	24.4	967.8	23.4	8.1
IBM	835.5	19.4	712.3	17.2	17.3
Hewlett-Packard	513.5	12.0	586.8	14.2	-12.5
Hitachi/HDS **	410.9	9.6	354.9	8.6	15.8
Dell ***	331.4	7.7	370.6	9.0	-10.6
Network Appliance	290.4	6.8	242.6	5.9	19.7
Sun Microsystems	229.7	5.3	223.9	5.4	2.6
Others	637.7	14.8	678.1	16.4	-6.0
Total	4,295.4	100.0	4137.0	100.0	3.8

Note* EMC revenue excludes OEM revenue from Dell and Fujitsu Siemens.
Note *** Hitachi/HDS revenue excludes OEM revenue from HP and Sun Microsystems.
Note *** Dell estimates were modeled based on prior quarters due to data publication prior to Earnings Announcement.
Source: Gartner Dataquest (March 2007)

Gartner external controller-based disk storage reports reflect hardware only revenue, as well as hardware revenue associated with financial leases and managed services. Optional storage software revenue and storage area network infrastructure components are excluded.

Additional information on the ECB disk storage market is available in the Gartner Dataquest report “Market Share: Disk Array Storage, All Regions, All Countries, 1Q05-4Q06." The report includes vendor market share by data access method, price band, channel and operating system segmentation. The report is available on Gartner’s Web site.

Gartner analysts will provide more detailed analysis on the state of the storage industry at upcoming Gartner Infrastructure, Operations, and Data Centre Summit in Sydney, Australia, May 8-9, and June 11-13 in Orlando, Florida. Additional information on Gartner’s conferences is available at www.gartner.com.

 

Contact:


Christy Pettey
Gartner
+1 408 468 8312
christy.pettey@gartner.com


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