IDC Finds Solid Third Quarter Growth in External Disk Storage Systems Market Despite Economic Slowdown

FRAMINGHAM, MA – December 5, 2008 – Worldwide external disk storage systems factory revenues posted 8.8% year-over-year growth totaling $4.9 billion in the third quarter of 2008 (3Q08), according to the IDC Worldwide Disk Storage Systems Quarterly Tracker. For the quarter, the total disk storage systems market grew to $6.6 billion in revenues, up 1.1% from the prior year's third quarter, driven by softness in server systems sales. Total disk storage systems capacity shipped reached 2,170 petabytes, growing 41.7% year over year.

“While the economic turmoil has already started impacting spending in various IT segments, including PCs and server systems, the market for external disk storage systems remained in stable condition with solid year-over-year growth," said Natalya Yezhkova, research manager, storage systems research at IDC. "Numerous IDC surveys of IT users suggest that storage is one of a few hardware categories where buyers are reluctant to cut spending independent of the economic situation. At the same time, current market conditions and tightening budgets are leading to longer purchasing cycles for storage systems and to the adoption of technologies designed to optimize storage utilization and/or reduce total cost of ownership."

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 23.0% revenue share in the third quarter, followed by IBM and HP in a statistical tie with 12.7% and 12.5% revenue share, respectively. Dell ended the quarter in the fourth position with 9.1% share. NetApp and Hitachi finished the quarter in a statistical tie for fifth with 8.2% and 8.0% revenue share respectively. Among the top 5 suppliers, EMC and NetApp posted the strongest year-over-year revenue growth during 2Q08, with 16.2% and 13.8% growth, respectively.

Network Disk Storage Systems

The total network disk storage market (NAS Combined with Open SAN) posted 15.3% year-over-year growth in the third quarter to more than $3.7 billion in revenues. EMC continues to maintain its leadership in the total network storage market with 27.9% revenue share, followed by HP with 12.3% revenue share.

In the Open SAN market, which grew 14.0% year over year, EMC lead with 25.0% revenue share, followed by HP with 14.7%. The NAS market grew 19.7% year over year, led by EMC with 37.7% revenue share and followed by NetApp with 28.2% share. The iSCSI SAN market continues to show strong momentum, posting 96.7% revenue growth compared to the prior year's quarter. Dell led the market with 31.1% revenue share, followed by EMC and NetApp in a statistical tie, with 13.3% and 12.5% share, respectively.

"The midrange market (systems priced in the $15,000-$299,999 price range) was particularly strong in the third quarter, growing 15% year-over-year," said Liz Conner, research analyst, IDC Storage Research. "IP storage played a major part in this growth fueled by the strong adoption of iSCSI SANs, specifically within virtualized server environments, as well as solid growth in NAS-based solutions, addressing the ever increasing growth in file-level data."

Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, Third Quarter of 2008

(Revenues are in Millions)

Vendor 3Q08 Revenue 3Q08 Market Share 3Q07 Revenue 3Q07 Market Share 3Q08/3Q07 Revenue Growth

1. EMC $1,120 23.0% $964 21.6% 16.2%

2. IBM $616 12.7% $618 13.8% -0.3%

2. HP $608 12.5% $589 13.2% 3.3%

4. Dell $444 9.1% $409 9.1% 8.6%

5. NetApp $398 8.2% $350 7.8% 13.8%

5. Hitachi $389 8.0% $380 8.5% 2.4%

Others $1,284 26.4% $1,158 25.9% 10.9%

All Vendors $4,859 100.0% $4,467 100.0% 8.8%

Source: IDC Worldwide Disk Storage Systems Quarterly Tracker, December 5, 2008

* 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 19.8% while EMC ended in the second position with EMC 16.9% market share. IBM came in the third position with 15.2%.

Top 5 Vendors, Worldwide Total Disk Storage Systems Factory Revenue, Third Quarter of 2008

(Revenues are in Millions)

Vendor 3Q08Revenue 3Q08MarketShare 3Q07Revenue 3Q07MarketShare 3Q08/3Q07RevenueGrowth

1. HP $1,318 19.8% $1,325 20.2% -0.5%

2. EMC $1,120 16.9% $964 14.7% 16.2%

3. IBM $1,011 15.2% $1,235 18.8% -18.1%

4. Dell $690 10.4% $756 11.5% -8.7%

5. Hitachi $400 6.0% $391 5.9% 2.3%

5. NetApp $398 6.0% $350 5.3% 13.8%

Others $1,707 25.7% $1,553 23.6% 9.9%

All Vendors $6,644 100.0% $6,574 100.0% 1.1%

Source: IDC Worldwide Disk Storage Systems Quarterly Tracker,, December 5, 2008

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

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.

IDC's Worldwide Disk Storage Systems Quarterly Tracker is a quantitative tool for analyzing the global disk storage market on a quarterly basis. The Tracker includes quarterly shipments and revenues (both customer and factory), Terabytes, $/Gigabyte, Gigabyte/Unit, and Average Selling Value. Each criteria can be segmented by location, installation base, operating system, vendor, family, model, and region.

For more information about IDC's Worldwide Disk Storage Systems Quarterly Tracker, please contact Hoang Nguyen at 508-935-4718 or hnguyen@idc.com.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 44 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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