Western Europe External Disk Market Grew 1% From 1Q11 to 1Q12

IDC reported that enterprise-grade external disk storage systems (EDSS) factory revenues in Western Europe grew 1.2 % to $1.35 billion in 1Q12 over the same period the previous year, according to its EMEA Quarterly Disk Storage Systems Tracker.

When accounting for changes in currency exchange rates, quarterly growth was 3.2 % for the region, while moving four-quarter trending shows a pace of 1.4 %.

"Regional growth for the quarter was largely driven by the expansion of major markets including the United Kingdom, Germany, and France, and market momentum in the Nordics. However, these positive developments were offset by dismal performance in the Italian and Belgian markets, hitting hard on some of the tier 1 vendors for large enterprises and government organizations", said Donna Taylor, research director for IDC’s European Storage Group.

HDD pricing and supply continued to adversely impact capacity shipment growth, IDC’s data confirms. Newly deployed enterprise disk storage systems capacity in Western Europe grew only 9.7 % in the first quarter over last year, as a result of the combination of higher disk prices and shortages in high-capacity enterprise grade drives. Improvements in the pricing environment and supply chain, however, have been faster than expected, pointing towards acceleration in capacity growth once again.

Top Vendor Highlights
Tier 1 vendor performances varied greatly for the quarter, as market turbulences affected each company differently.

High-end storage deployments, or systems with an average selling price of over $250k, declined by 10% for the quarter after a strong fourth quarter last year and widespread budget freezes in markets like Italy and Belgium. EMC and IBM saw their market shares decline as a result in this segment, hit by a combination of weakness in their customer base and competitive dynamics. On the other hand, HDS managed to grow its high-end business dynamically with the VSP, while HP ramped up its 3Par efforts and grew XP family sales.

Midrange, or systems selling between $25k and 250k, enjoyed some very strong uptake for the quarter compared to the previous year. This was mainly driven by a line-up of new, enhanced midrange products from major vendors, stimulating demand and shifting money from both entry-level and high-end into the category. EMC executed well against its broad portfolio and found additional sales with the VNX/VNXe family, while IBM’s gains were led by V7000. NetApp, the market share leader for midrange systems, also expanded its sales, albeit at a slower pace against an already very strong quarter a year ago.

HP lost midrange market share due to its weakness in legacy sales, while Dell lost some ground due to its migration over to the Compellent platform from the OEM EMC arrays it sold in the past. HDS’s AMS systems approached their end of life with sales dropping quickly, as the vendor prepared its next generation of products. Traditional entry-level products of Tier 1 vendors did well, despite some spending having shifted towards midrange pricebands. The presence of Tier 2 players grew in the entry-level segment over past year.

"Overall, NetApp once again posted the highest growth out of all the top vendors for the quarter, closing in on EMC’s primary storage systems business in Western Europe", said Daniel Bizo, storage research analyst for IDC. "While the second position was hotly contested by NetApp, HP, and IBM throughout last year, that is no longer the case, as the three vendors are distantly spread out in second, third and, fourth place."

 Factory Revenue Growth
      From EDSS Sales,
  1Q12, Western Europe

 (Source IDC, June 2012)