External Disk Storage Systems Continue Steady Climb in Second Quarter of 2007, According to IDC

FRAMINGHAM, MA. – September 7, 2007 – According to the IDC Worldwide Quarterly Disk Storage Systems Tracker, worldwide external disk storage systems factory revenues in the second quarter of 2007 grew 6.2% from a year ago to $4.3 billion, marking 18 consecutive quarters of year-over-year growth. For the quarter, the total disk storage systems market grew to $6.1 billion up 5.9% from the prior year's quarter. Total disk storage systems capacity shipped grew 50.1% from a year-ago quarter, reaching 1.2 exabytes.

"We continue to see a lull in high-end spending in the second quarter of 2007, particularly on external storage systems selling over $300,000," said Brad Nisbet, program manager, IDC Storage Systems. "2006 proved to be an impressive year of spending among large organizations looking to achieve datacenter consolidation, especially in the U.S. With many large customers easing back on the purchase of additional capacity in the first half of 2007, disk storage systems vendors with a diversified portfolio of products and broad bases of customers will be best positioned to overcome the varying patterns in spending."

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 21.4% revenue share, followed by HP and IBM in a statistical tie for the number 2 position with 14.4% and 13.6% revenue share, respectively. Dell and Hitachi rounded out the top 5 with 9.4% and 8.1%, respectively. Among the top 5 suppliers, Dell posted the strongest year-over-year revenue growth (23.8%) during 2Q07.

Network Disk Storage Systems

The total network disk storage market (NAS Combined with Open SAN) posted a healthy 12.8% year-over-year growth in the second quarter to $3.1 billion. EMC continues to maintain its leadership in the total network storage market with 26.9% revenue share, followed by HP and IBM with 14.7% and 12.1% revenue share, respectively.

In the Open SAN market, which reached $2.4 billion and grew 14.2% year over year, EMC was the number 1 vendor with 23.8% revenue share, followed by HP with 17.1%. The NAS market grew 7.8% year over year to $639 million, led by EMC with 38.5% revenue share and followed by Network Appliance with 27.0% share. The iSCSI SAN market continues to show strong momentum, posting 57.2% revenue growth year over year, reaching $191 million in the second quarter. Network Appliance continues to lead the market with 21.3% share, followed by EMC with 16.8% share.

"Despite some weakness in high-end systems selling over $300,000, Open SAN systems (including Fibre Channel and iSCSI SAN) are showing signs of growth in lower price bands," said Liz Conner, research analyst, IDC Storage Systems. "Vendors continue to invest in bringing networked storage to SMBs and smaller enterprise customers. Although this opportunity is still unfolding, we are seeing a variety of technology options begin to resonate with customers in this segment."

Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, Second Quarter of 2007

(Revenues are in Millions)

Vendor 2Q07 Revenue Market Share 2Q06 Revenue Market Share 2Q07/2Q06 Revenue Growth

1. EMC $920 21.4% $830 20.5% 10.8%

2. HP $619 14.4% $620 15.3% -0.3%

2. IBM $584 13.6% $558 13.8% 4.7%

4. Dell $405 9.4% $327 8.1% 23.8%

5. Hitachi $348 8.1% $332 8.2% 4.7%

Others $1,423 33.1% $1,380 34.1% 3.1%

All Vendors $4,299 100.0% $4,048 100.0% 6.2%

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker, September 7, 2007

Total Disk Storage Systems Market

In the total worldwide disk storage systems market, HP lead the market with 20.6% followed by IBM with 19.3% revenue share respectively. EMC maintained the third position with 15.0% revenue share.

Top 5 Vendors, Worldwide Total Disk Storage Systems Factory Revenue, Second Quarter of 2007

(Revenues are in Millions)

Vendor 2Q07 Revenue Market Share 2Q06 Revenue Market Share 2Q07/2Q06 Revenue Growth

HP $1,270 20.6% $1,1241 21.4% 2.3%

IBM $1,184 19.3% $1,131 19.5% 4.7%

EMC $920 15.0% $830 14.3% 10.8%

Dell $603 9.8% $489 8.4% 23.4%

Sun Microsystems $379 6.2% $391 6.7% -3.1%

Others $1,794 29.2% $1,724 29.7% 4.1%

All Vendors $6,149 100.0% $5,806 100.0% 5.9%

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker, September 7, 2007

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 Quarterly Disk Storage Systems 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 Quarterly Disk Storage Systems Tracker, please contact Hoang Nguyen at 508-935-4718 or hnguyen@idc.com.

About IDC

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