External Disk Storage Systems Posts Third Consecutive Quarter of Year-on-Year Growth, According to IDC

FRAMINGHAM, MA – JUNE 4, 2004 – Worldwide external disk storage systems vendor revenues grew 6.5% year-over-year to $3.5 billion in the first quarter of 2004 (1Q04), posting the third consecutive quarter of year-over-year growth, according to IDC's Worldwide Quarterly Disk Storage Systems Tracker. The total disk storage systems market grew at a slightly slower rate of 3.5% year-over-year, compared with 1Q03. Storage capacity continues to outpace revenue growth, growing 39.5% year-over-year to 247 petabytes shipped during the quarter.

"From an overall market standpoint, North America is the bright spot, delivering four consecutive quarters of real growth," said John McArthur, group vice president at IDC. "The weak dollar continues to be largely responsible for perceived growth in other major regions, however, and Western Europe is particularly challenging, with factory revenue flat to slightly down, even with the weakened dollar."

Total External Disk Storage Systems

EMC took the leadership position from HP in the external disk storage systems market, propelled by a 26% year-over-year revenue growth rate and now claiming 20.2% revenue market share in 1Q04. HP came in second with 18.0% revenue share followed by IBM with 12.0% share. Network Appliance and Dell also posted strong year-over-year revenue growth among the top vendors during first quarter of 2004, with 22.3% and 21.5% growth respectively.

External RAID continues to account for more than 90% of the external disk storage systems market, growing 8.9% year-over-year. EMC led the external RAID market with 22.0% revenue share, followed by HP with 16.9% share.

Networked Disk Storage Systems

The networked disk storage systems market (NAS combined with Open and iSCSI SAN) posted 17.5% year-over-year growth in the first quarter to more than $1.9 billion, largely due to strong absolute dollar growth in the Open SAN market. EMC continues to maintain its leadership in the total networked storage market with 28.5% revenue share, followed by HP and IBM with 22.8% and 10.5% revenue share, respectively.

In the Open SAN market, which grew 16.5% compared to the same quarter a year ago, EMC moved into a statistical tie with HP for the leadership position. HP and EMC had 27.0% and 26.8% revenue share, respectively. In the NAS market, Network Appliance moved into a virtual tie with EMC for the number 1 position. Network Appliance and EMC had 35.1% and 34.6% share, respectively.

Although representing less than 1% of the networked disk storage systems market, the iSCSI SAN market posted more than 40% quarter-over-quarter revenue growth with Network Appliance leading the market with 48.4% share, followed by EMC with 27.7% share.

"The migration from internal, direct-attached to external, networked storage continues, representing increased opportunity for storage systems suppliers," said Brad Nisbet, program manager at IDC. "Customers across all price segments of the market are looking to consolidate and simplify their infrastructure through networked storage."

Total Disk Storage Systems Market – Internal plus External

In the total worldwide disk storage systems market, HP maintained its lead with 23.2% revenue share followed by IBM with 19.7% share. EMC maintained the third position with 13.9% revenue share. EMC and IBM posted the largest share gain year-over-year among the top vendors during 1Q04, with 2.5 and 1.4 points gain, respectively.

Top 5 Vendors, Worldwide External Disk Storage Systems Factory

Revenue, First Quarter 2004

(Revenues are in Millions)

1Q04 Market 1Q03 Market Revenue

Vendor Revenue Share Revenue Share Growth

1Q04/1Q03

———————————————————————-

EMC $707 20.2% $561 17.1% 26.0%

HP $630 18.0% $634 19.3% -0.7%

IBM $421 12.0% $405 12.3% 4.0%

Hitachi $338 9.7% $324 9.8% 4.5%

Sun Microsystems $227 6.5% $229 7.0% -0.8%

Dell $225 6.4% $185 5.6% 21.5%

Others $954 27.2% $951 28.9% 0.3%

All Vendors $3,503 100.0% $3,289 100.0% 6.5%

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker, 1Q04

Top 5 Vendors, Worldwide Disk Storage Systems Factory Revenue,

First Quarter 2004

(Revenues are in Millions)

1Q04 Market 1Q03 Market Revenue

Vendor Revenue Share Revenue Share Growth

1Q04/1Q03

———————————————————————-

HP $1,181 23.2% $1,258 25.6% -6.1%

IBM $1,003 19.7% $903 18.4% 11.2%

EMC $707 13.9% $561 11.4% 26.0%

Dell $351 6.9% $296 6.0% 18.8%

Hitachi $348 6.8% $335 6.8% 4.1%

Sun Microsystems $309 6.1% $325 6.6% -5.0%

Others $1,186 23.3% $1,235 25.1% -3.9%

All Vendors $5,086 100.0% $4,912 100.0% 3.5%

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker, 1Q04