IDC Finds Encouraging Signs of a Turnaround in the Enterprise Storage Systems Market

FRAMINGHAM, Mass. – December 4, 2009 – Worldwide external disk storage systems factory revenues posted a 10.0% decline year over year, totaling $4.4 billion in the third quarter of 2009 (3Q09), according to the IDC Worldwide Quarterly Disk Storage Systems Tracker. For the quarter, the total disk storage systems market declined to $6.0 billion in revenues, a 9.6% decline from the prior year's third quarter, driven by continued weakness in server systems sales. Total disk storage systems capacity shipped reached 2,661 petabytes, growing 21% year over year.

"Although the external disk storage market posted another year-over-year decline in the third quarter, the rate of decline has started to slow. Moreover, the market experienced a sequential gain over the previous quarter, with many of the top storage vendors posting increases," said Steve Scully, research manager, Enterprise Storage at IDC. "The stability in the storage market that IDC first began to see last quarter is now being felt more broadly by storage vendors."

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 24.2% revenue share in the third quarter, followed by IBM with 13.2% share. HP ended the quarter in the third position with 11.8% market share. Dell and NetApp finished the quarter in a statistical tie* for fourth position with 9.3% and 8.7% revenue share respectively.

Network Disk Storage Systems

The total network disk storage market (NAS Combined with Open / iSCSI SAN) declined 7.6% year over year in the third quarter to $3.4 billion in revenues. EMC continues to maintain its leadership in the total network storage market with 29% revenue share, followed by IBM with 12.5% revenue share.

In the Open SAN market, which declined 16% year over year, EMC maintained its lead with 24.4% revenue share. The NAS market grew 2.2% year over year, led by EMC with 46.4% revenue share and followed by NetApp with 24.5% share. The iSCSI SAN market continues to show strong momentum, posting 24.7% revenue growth compared to the prior year's quarter. Dell led the market with 33.6% revenue share, followed by EMC with 15.1%.

"The third quarter ushered in further evidence of recovery in the storage market, as previously declining markets have started to post quarter-over-quarter gains," said Liz Conner, research analyst, Storage Systems. "IDC-defined market segments showed quarter-over-quarter external revenue growth in all segments (entry, midrange and high-end) for the first time since 4Q08. In addition, both the total NAS and iSCSI markets posted year-over-year gains, while the FC SAN market had a lower rate of decline than in previous quarters. These are all encouraging signs of renewed vigor in the enterprise storage market."

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

(Revenues are in Millions)

Vendor 3Q09Revenue 3Q09MarketShare 3Q08Revenue 3Q08MarketShare 3Q09/3Q08RevenueGrowth

1. EMC** $1,059 24.2% $1,136 23.4% -6.8%

2. IBM $577 13.2% $617 12.7% -6.5%

3. HP $517 11.8% $609 12.5% -15.0%

4. Dell $407 9.3% $447 9.2% -8.8%

4. NetApp $381 8.7% $395 8.1% -3.7%

Others $1,429 32.7% $1,654 34.1% -13.6%

All Vendors $4,370 100.0% $4,858 100.0% -10.0%

Source: IDC Worldwide Disk Storage Systems Quarterly

Tracker, December 3, 2009

Notes:

* IDC declares a statistical tie in the worldwide disk storage systems market when there is less than one percent difference in the factory revenues of two or more vendors.

** Starting in Q3 2009, EMC is reported as the combined entity of EMC and Data Domain.

Total Disk Storage Systems Market

In the total worldwide disk storage systems market, HP and EMC ended the quarter in a statistical tie* for the number one position, with 18.6% and 17.7% market share respectively.

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

(Revenues are in Millions)

Vendor 3Q09Revenue 3Q09MarketShare 3Q08Revenue 3Q08MarketShare 3Q09/3Q08RevenueGrowth

1. HP $1,113 18.6% $1,318 19.9% -15.5%

1. EMC** $1,059 17.7% $1,136 17.1% -6.8%

3. IBM $939 15.7% $1,012 15.3% -7.2%

4. Dell $786 13.1% $724 10.9% 8.5%

5. NetApp $381 6.4% $395 6.0% -3.7%

Others $1,717 28.6% $2,046 30.8% -16.0%

All Vendors $5,995 100.0% $6,631 100.0% -9.6%

Source: IDC Worldwide Disk Storage Systems Quarterly

Tracker, December 3, 2009

Notes:

* IDC declares a statistical tie in the worldwide disk storage systems market when there is less than one percent difference in the factory revenues of two or more vendors.

** Starting in Q3 2009, EMC is reported as the combined entity of EMC and Data Domain.

Taxonomy Notes:

IDC defines a Disk Storage System as a set of storage elements, including controllers, cables, and (in some instances) host bus adapters, associated with three or more disks. A system may be located outside of or within a server cabinet and the average cost of the disk storage systems does not include infrastructure storage hardware (i.e. switches) and non-bundled storage software.

The information in this quantitative study is based on a branded view of the disk storage systems sale. Revenue associated with the products to the end user is attributed to the seller (brand) of the product, not the manufacturer. Original equipment manufacturer (OEM) sales are not included in this study. In this study, Hitachi Data Systems (HDS) sales do not reflect their OEM sales to Sun Microsystems and Hewlett-Packard.