Economy Continues Its Negative Influence, Impacting Enterprise Storage Systems in the First Quarter of 2009, According to IDC

FRAMINGHAM, Mass. – June 5, 2009 – Worldwide external disk storage systems factory revenues posted year-over-year growth of -13.6%, totaling $4.2 billion in the first quarter of 2009 (1Q09), according to the IDC Worldwide Quarterly Disk Storage Systems Tracker. For the quarter, the total disk storage systems market declined to $5.6 billion in revenues, an 18.2% decline from the prior year's first quarter, driven by continued weakness in server systems sales. Total disk storage systems capacity shipped reached 2,146 petabytes, growing 14.8% year over year.

"The disk storage system vendors are really seeing the impact of the global economic downturn in the first quarter revenues," said Steve Scully, research manager, Enterprise Storage at IDC. "However, while total revenues declined year over year, the overall storage capacity shipped continued to grow. These contrasting results are due to a combination of currency implications, lower overall sales, shifts in product mix, and aggressive pricing actions."

“Although the economic crisis was fully realized by the enterprise storage systems market in the first quarter of 2009, the quarter wasn’t without its bright spots,” said Liz Conner, research analyst, Storage Systems. “Entry-level price bands ($0K – $14.99K) showed 9.9% year-over-year growth and the midrange price band ($15K – $49.99K) was flat year over year, supporting IDC’s belief that storage products are still in demand, with customer spending trending towards more modular, price point options. In addition, the high-end price band ($300K-499.99K) saw a 14.5% year-over-year growth as vendors discounted their very high-end products, shifting the ASV’s into lower price bands in order to meet the demand for high-end storage while accounting for reduced IT budgets.”

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 20.7% revenue share in the first quarter, followed by HP and IBM in a statistical tie for the second position with 11.5% and 11.3% revenue share, respectively. Dell and Hitachi finished the quarter in a statistical tie for fourth place with 9.8% and 9.4% revenue share respectively.

Network Disk Storage Systems

The total network disk storage market (NAS Combined with Open SAN) had year-over-year growth of -12.5% in the first quarter with more than $3.1 billion in revenues. EMC continues to maintain its leadership in the total network storage market with 26.0% revenue share, followed by NetApp with 12.0% revenue share.

In the Open SAN market, which declined 14.3% year over year, EMC lead with 21.9% revenue share. The NAS market declined 6.7% year over year, led by EMC with 39.0% revenue share and followed by NetApp with 28.7% share. The iSCSI SAN market continued to show strong momentum, posting 40.5% revenue growth compared to the prior year's quarter. Dell led the market with 36.4% revenue share, followed by EMC with 15.8%.

"Price sensitivity was a big factor in the healthy growth of iSCSI SAN, the only installation environment segment that ended the quarter in positive territory," added Natalya Yezhkova, research manager, IDC Storage Systems. "While still a relatively small segment of the market, iSCSI SAN is the bright spot for end users and for vendors, as it helps end users to deploy network storage, often with enterprise-class functionality, at a lower price point than traditional FC SAN, and, thus, creates more selling opportunities for vendors."

Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, First Quarter of 2009

(Revenues are in Millions)

Vendor 1Q09 Revenue 1Q09 Market Share 1Q08 Revenue 1Q08 Market Share 1Q09/1Q08 Revenue Growth

1. EMC $ 871 20.7% $ 1,037 21.3% -16.0%

2. HP $ 482 11.5% $ 600 12.3% -19.6%

2. IBM $ 476 11.3% $ 560 11.5% -15.0%

4. Dell $ 410 9.8% $ 450 9.2% -8.8%

4. Hitachi $ 394 9.4% $ 433 8.9% -9.1%

5. NetApp $ 373 8.9% $ 432 8.9% -13.5%

Others $1196 28.5% $1353 27.8% -11.6%

All Vendors $ 4,203 100.0% $ 4,865 100.0% -13.6%

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker, March 5, 2009.

* Note: Starting in Q1 2008, Dell is reported as the combined entity of Dell and EqualLogic.

Total Disk Storage Systems Market

In the total worldwide disk storage systems market, HP led with 17.4% followed by EMC with 15.5% market share.

Top 5 Vendors, Worldwide Total Disk Storage Systems Factory Revenue, First Quarter of 2009

(Revenues are in Millions)

Vendor 1Q09 Revenue 1Q09 Market Share 1Q08 Revenue 1Q08 Market Share 1Q09/1Q08 Revenue Growth

1. HP $975 17.4% $1,314 19.1% -25.8%

2. EMC $871 15.5% $1,037 15.1% -16.0%

3. IBM $811 14.4% $1,036 15.1% -21.7%

4. Dell $660 11.7% $797 11.6% -17.2%

5. Hitachi $410 7.3% $448 6.5% -8.5%

5. NetApp $373 6.6% $432 6.3% -13.5%

Others $1,515 27.0% $1,800 26.2% -15.8%

All Vendors $5,616 100.0% $6,865 100.0% -18.2%

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker, March 5, 2009.