WW External Disk Market Rebounded With 18% Growth in 1Q10

Reflecting a modestly improving global economy, the need to refresh dated storage infrastructures and the rising deployment of applications that favor file-access applications, worldwide external controller-based (ECB) disk storage revenue in the first quarter of 2010 grew 18.3 percent over the same period last year, according to Gartner, Inc.

Worldwide ECB revenue totaled $4.5 billion in the first quarter of 2010, up from $3.8 billion in the first quarter of 2009. Except for the Japan market, the other major geographic regions grew by double-digits year-over-year, with the North American market growing 25.5 percent.

Due to the decline that the industry suffered last year, some of the growth rates appear higher than usual. In comparing first quarter 2010 ECB disk storage revenue to first quarter 2008 revenue of $4.2 billion, ECB disk storage revenue grew 5.2 percent. File-access ECB disk storage grew from $594.5 million in the first quarter of 2008 to $846.5 million in the first quarter of 2010, a 42.4 percent increase, while block access ECB disk storage was flat at $3.6 billion in first quarter 2010 and first quarter 2008.

"The more cost-effective ECB disk storage systems that conform to the modular architecture continue to gain share, with the more expensive monolithic/frame-based ECB storage systems declining to 27.7 percent of the total ECB disk storage market in the first quarter of 2010," said Roger Cox, research vice president at Gartner. "Year over year, raw terabyte shipments grew 65 percent in the first quarter of 2010, while the price per terabyte decreased 28.3 percent."

The top four vendors achieved greater year-over-year revenue increases than the overall ECB disk storage market in the first quarter of 2010. EMC’s market share gain reflects strong Symmetrix, CLARiiON and Celerra organic growth, as well as its Data Domain acquisition. Gartner estimates that Data Domain revenue represented $124.6 million of EMC’s $1,223.3 billion in the first quarter of 2010.

            WW External Controller-Based Disk Storage Vendor
                          Revenue Estimates for 1Q10
                              (Millions of U.S. Dollars)

  
Source: Gartner (June 2010)
(1) EMC revenue excludes OEM revenue from Dell and Fujitsu Technology Solutions.
(2) Hitachi/Hitachi Data Systems revenue excludes OEM revenue from HP and Oracle.

IBM also achieved steady internal growth in its DS5000/4000/3000 series, with XIV systems accounting for 44.4 percent of its year-over-year revenue growth in the first quarter of 2010.

NetApp’s unified storage architecture continued to propel its revenue growth, enabling NetApp to jump from sixth place in the first quarter of 2009 to third place in the first quarter of 2010.

Dell continued to strengthen its position in the iSCSI market with its PS Series (EqualLogic) as well as in the entry-level ECB disk-storage market with its PowerVault MD3000 platform. However, its Dell/EMC-branded CLARiiON products declined $28.9 million in the first quarter of 2010 over the first quarter of 2009.

The vendors ranked fifth through eighth in worldwide ECB disk storage revenue all lost share in the first quarter of 2010.

The decline in XP series revenue, coupled with its anemic position in the fast-growing file-access segment, offset HP’s block-access modular ECB disk storage system revenue gains in the first quarter of 2010.

With 30.6 percent of its ECB disk storage system revenue coming from Japan, Hitachi/Hitachi Data System’s (HDS’s) 1Q10 revenue performance was hampered by the gloomy economy in Japan. In addition, we also note that its monolithic/frame-based USPV/USPVM performance, which accounts for 52.8 percent of Hitachi/HDS’s 1Q10 revenue, was down 13.6 percent year-over-year.

Oracle’s first quarter 2010 results reflect the negative impact of the prolonged period it took to obtain the necessary governmental approvals, and its disengagement of the StorageTek 9000V series reseller agreement with Hitachi Data Systems. However, the 7000 series unified storage system represented at least one bright spot for Oracle in the first quarter of 2010, with revenue increasing to $35.9 million from $17.7 million in the first quarter of 2009.

While Fujitsu increased its year-over-year market penetration outside of Japan from 16.3 percent in the first quarter of 2009 to 23.4 percent in the first quarter of 2010, its first quarter 2010 performance was heavily influenced by Japan’s dour economy, and its reliance on its monolithic/frame-based disk storage system, which declined 27 percent.

Gartner ECB 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 Gartner’s "Quarterly Statistics: Disk Array Storage, All Regions, All Countries, 1Q10 Update." The report includes vendor market share by data access method, price band, sales channel and operating system segmentation.