External Disk Storage Systems Shine Once Again in the First Quarter of 2006, According to IDC

FRAMINGHAM, MA – JUNE 2, 2006 – Worldwide external disk storage systems factory revenues in the first quarter of 2006 grew 10.3% from one year ago to $4.2 billion, according to IDC's Worldwide Disk Storage Systems Quarterly Tracker. For the quarter, the total disk storage systems market grew to $5.8 billion, up 6.7% from the prior year's first quarter. Total disk storage systems capacity shipped reached 627 petabytes, growing 51.5%.

"Customers continue to increase their reliance on business data and seek cost effective ways to store, protect, and manage this critical data," said Brad Nisbet, program manager, IDC Storage Systems. "Despite the server market being down nearly 2% in the first quarter of 2006, the comparable positive growth of external disk systems points to the importance of storage in helping customers improve overall business efficiency."

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 21.8% revenue share, followed by HP and IBM with 17.9% and 12.0% revenue share, respectively. Dell and Hitachi rounded out the top 5 in a statistical tie with 8.2% and 8.1%, respectively.

Network Disk Storage Systems

The total network disk storage market (NAS Combined with Open and iSCSI SAN) posted 15.4% year-over-year growth in the first quarter to more than $2.8 billion. EMC continues to maintain its leadership in the total network storage market with 28.7% revenue share, followed by HP and IBM with 19.3% and 10.7% revenue share, respectively. Network Appliance and IBM posted the strongest year-over-year revenue growth for the quarter among the top 5, with 24.4% and 22.6% growth, respectively.

In the NAS market, which grew 14.7% year over year, EMC led with 37.1% revenue share, followed by Network Appliance with 34.4% share. The iSCSI SAN market continues to show strong momentum, posting 37.7% revenue growth compared to the prior year's quarter reaching $92 million. Network Appliance continues to lead the market with 29.7% share, followed by EMC with 24.2% share.

"The high-end segment (systems priced at $500,000 and over) showed the strongest year-over-year growth of nearly 40%," said Natalya Yezhkova, senior research analyst, IDC Storage Systems. "Although data protection, digital content and other emerging data-intensive applications are driving market growth mainly for midrange systems, demand for highly-scalable primary storage also remains strong indicating the ongoing consolidation within corporate data centers."

Top 5 Vendors, Worldwide External Disk Storage Systems Factory

Revenue, First Quarter of 2006

(Revenues are in Millions)

Vendor Q1 2006 Revenue Market Share Q1 2005 Revenue Market Share Revenue Growth 1Q06/1Q05

EMC $ 911 21.8% $ 808 21.4% 12.6%

HP $ 745 17.9% $ 676 17.9% 10.2%

IBM $ 502 12.0% $ 437 11.6% 14.8%

Dell $ 342 8.2% $ 293 7.8% 16.5%

Hitachi $ 340 8.1% $ 349 9.2% -2.7%

Others $ 1,334 32.0% $ 1,218 32.2% 9.5%

All Vendors $ 4,173 100.0% $ 3,782 100.0% 10.3%

Source: IDC, June 2, 2006

Total Disk Storage Systems Market

In the total worldwide disk storage systems market, HP lead the market with 22.9% followed by IBM with 17.9% revenue share respectively. EMC maintained the third position with 15.6% revenue share.

Top 5 Vendors, Worldwide Total Disk Storage Systems Factory Revenue,

First Quarter of 2006

(Revenues are in Millions)

Vendor Q1 2006 Revenue Market Share Q1 2005 Revenue Market Share Revenue Growth 1Q06/1Q05

HP $ 1,335 22.9% $ 1,231 22.5% 8.5%

IBM $ 1,048 17.9% $ 1,008 18.4% 4.0%

EMC $ 911 15.6% $ 808 14.8% 12.6%

Dell $ 508 8.7% $ 456 8.3% 11.3%

Hitachi $ 349 6.0% $ 359 6.6% -2.8%

Sun Microsystems $ 309 5.3% $ 275 5.0% 12.4%

Others $ 1,383 23.7% $ 1,336 24.4% 3.5%

All Vendors $ 5,842 100.0% $ 5,473 100.0% 6.7%

Source: IDC, June 2, 2006

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 market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com .