Year-Over-Year Quarterly External Disk Storage Systems Market Experiences Negative Growth for the First Time in More Than 5 Years, According to IDC

FRAMINGHAM, Mass. – March 6, 2009 – Worldwide external disk storage systems factory revenues posted a year-over-year decline of 0.5% with revenues totaling $5.3 billion in the fourth quarter of 2008 (4Q08), according to the IDC Worldwide Disk Storage Systems Quarterly Tracker. For the quarter, the total disk storage systems market revenues were $7.3 billion, a decline of 5.9% from the prior year's fourth quarter, driven by weakness in server systems sales. Total disk storage systems capacity shipped reach 2,460 petabytes, growing only 27.3% year over year.

"Because of the global economic crisis, the last quarter of 2008 was tough for the disk storage systems market, resulting in a market decline from the same quarter last year," said Natalya Yezhkova, research manager, Storage Systems. “The negative impact, however, varied among market segments. For instance, high-end storage was impacted negatively by a freeze in end-user spending and longer purchasing cycles; but some low-end and midrange storage segments actually increased as end users broadened their search for storage solutions in these lower-cost segments to satisfy their increasing storage needs while optimizing investments in storage infrastructure."

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 23.3% revenue share in the fourth quarter, followed by IBM and HP with 15.7% and 13.0% revenue share, respectively. Dell ended the quarter in the fourth position with 9.3% share. Hitachi and NetApp finished the quarter in a statistical tie for fifth with 7.8% and 7.0% revenue share respectively. Among the top 5 suppliers, Dell and HP posted the strongest year-over-year revenue growth during 4Q08, with 10.0% and 5.8% growth, respectively.

Network Disk Storage Systems

The total network disk storage market (NAS Combined with Open SAN) posted 3.6% year-over-year growth in the fourth quarter to more than $4.1 billion in revenues. EMC continues to maintain its leadership in the total network storage market with 28.6% revenue share, followed by IBM with 14.5% revenue share.

In the Open SAN market, which grew 2.2% year over year, EMC led with 24.2% revenue share, followed by IBM with 16.5%. The NAS market grew 8.6% year over year, led by EMC with 43.8% revenue share and followed by NetApp with 24.1% share. The iSCSI SAN market continues to show strong momentum, posting a 61.6% revenue growth compared to the prior year's quarter. Dell led the market with 35.3% revenue share, followed by EMC with 16.8%.

"Although network storage continued its steady growth in the fourth quarter, fibre channel SAN saw a downturn, falling 3.2% year over year. End users are looking for more economical ways to meet their growing storage needs as many IT budgets shrink due to the current economic conditions, ," said Liz Connor, Research Analyst, Disk Storage System Tracker. " FC SAN systems fulfill many high-end storage needs, but usually at a higher average price. However, iSCSI and NAS storage solution alternatives offer increased enterprise-level features at lower costs, and compel vendors to consider these technologies. Continued end user education, growing confidence in IP-based storage, increasing product sophistication, as well as a typically lower price point, result in increased adoption of iSCSI and NAS by many budget conscious end users."

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

(Revenues are in Millions)

Vendor 4Q08Revenue 4Q08MarketShare 4Q07Revenue 4Q07MarketShare 4Q08/4Q07RevenueGrowth

1. EMC $ 1,241 23.3 % $ 1,200 22.4 % 3.4 %

2. IBM $ 838 15.7 % $ 945 17.7 % -11.3 %

3. HP $ 691 13.0 % $ 654 12.2 % 5.8 %

4. Dell $ 493 9.3 % $ 448 8.4 % 10.0 %

5. Hitachi $ 413 7.8 % $ 399 7.5 % 3.5 %

5. NetApp $ 374 7.0 % $ 395 7.4 % -5.4 %

Sun Microsystems $ 275 5.2 % $ 305 5.7 % -10.1 %

All Vendors $ 5,323 100.0 % $ 5,351 100.0 % -0.5 %

Source: IDC Worldwide Disk Storage Systems Quarterly Tracker, March 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 19.7% while IBM and EMC ended in a statistical tie for the second position, with 18.0% and 17.1% market share, respectively.

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

(Revenues are in Millions)

Vendor 4Q08Revenue 4Q08MarketShare

4Q07Revenue 4Q07MarketShare

4Q08/4Q07RevenueGrowth

1. HP $ 1,430 19.7 % $ 1,452 18.8 % -1.5 %

2. IBM $ 1,310 18.0 % $ 1,695 22.0 % -22.7 %

2. EMC $ 1,241 17.1 % $ 1,200 15.6 % 3.4 %

4. Dell $ 795 10.9 % $ 821 10.6 % -3.2 %

5. Hitachi $ 424 5.8 % $ 407 5.3 % 4.2 %

5. Sun Microsystems $ 419 5.8 % $ 425 5.5 % -1.5 %

Others $ 1,640 22.6 % $ 1,716 22.2 % -4.4 %

All Vendors $ 7,259 100.0 % $ 7,716 100.0 % -5.9 %

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