Disk storage market tops US$13 billion

Global sales of external controller-based disk storage grew slowly last year as four of the major vendors suffered unusual revenue declines, according to a US market research firm.

Revenues last year increased by 5.1 percent over 2003 to US$13.1 billion, while revenues in the fourth quarter grew by only 1.2 percent over the same period a year ago, Gartner said.

The anaemic results occurred despite enterprise investments in storage infrastructures to cut operational costs and improve business processes, Gartner said.

"During the second half of 2004, four vendors, IBM, HP, Hitachi/HDS and Sun Microsystems experienced disruptive field execution or product transition issues, resulting in atypical year-over-year revenue declines," Gartner analyst Roger Cox said in a statement.

Other vendors did much better. EMC's broad product portfolio, focused field organisation and channel-friendly partnership programs helped it gain two points of market share in 2004, Gartner said.

Network Appliance grew fastest among top-tier vendors, increasing revenue 25.6 percent.

"Network Appliance was successful in penetrating the mission-critical and database markets," Cox said. "Its unified storage systems, supported by the same operating system and software products, have proved to simplify storage management over direct attached and conventional SAN-attached storage."

Dell posted the second highest growth rate at 23.4 percent in 2004, reflecting the company's investments in enterprise quality pre-sale and post-sale service and support infrastructures.

HP sold more units in 2004, but its external controller-based disk storage revenue dropped 6.4 percent. The company was late to market with low-cost high-capacity disk drives for its EVA and MSA systems, Gartner said.

IBM failed to seamlessly change over from its Enterprise Storage Server to new DS8000 and DS6000 systems, causing a 2004 revenue shortfall, Gartner said.

Sun's lacklustre performance was due to a lack of commitment to aggressively sell systems and servers together. A fall in SE9000-series units and revenue also contributed to the company's struggles, Gartner said.

During the second half of 2004, Hitachi/HDS experienced elongated selling cycles in association with its high-end Lightning and TagmaStore systems, as users evaluated the benefits of migrating to TagmaStore with its controller-based virtualisation capabilities.

The company's 2004 revenue would have declined without the benefit of a favourable Yen versus US dollar exchange rate, Gartner said.

The top eight vendors in 2004, including market share, were EMC with 22.6 percent; HP with 16.5 percent; IBM 12 percent; Hitachi/HDS 8.7 percent; Sun 6.3 percent; Dell 5.8 percent; Network Appliance 5.4 percent; and StorageTek with 1.2 percent.