Revenue Growth Slows for External Disk Storage Systems Market Despite Strong Demand for Storage Capacity, According to IDC

FRAMINGHAM, MA – December 6, 2007 – According to the IDC Worldwide Quarterly Disk Storage Systems Tracker, worldwide external disk storage systems factory revenues in the third quarter of 2007 (3Q07) grew 5.1% from a year ago to $4.4 billion, down slightly from the three previous quarters but still marking 19 consecutive quarters of year-over-year growth. For the quarter, the total disk storage systems market grew to $6.3 billion up 4.3% from the prior year's quarter. Total disk storage systems capacity shipped grew 49.4% from a year-ago quarter, reaching 1.3 exabytes.

"External networked storage for open systems enjoyed healthy growth this quarter, pointing to the continuing need for solutions that help customers effectively store and manage data growth," said Brad Nisbet, program manager, IDC Storage Research. "In particular, we are seeing strong demand for NAS systems aimed at easing the pain associated with managing file-based data, and an increased demand for iSCSI systems in both SMB and virtualized server environments."

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 21.9% revenue share, followed by IBM and HP in a statistical tie for the number 2 position with 14.0% and 13.4% revenue share, respectively. Dell and Hitachi rounded out the top 5 with 9.3% and 8.5%, respectively. Among the top 5 suppliers, Dell posted the strongest year-over-year revenue growth (17.9%) during 3Q07.

Network Disk Storage Systems

The total network disk storage market (NAS Combined with Open SAN) posted a healthy 9.7% year-over-year growth in the third quarter to $3.2 billion. EMC continues to maintain its leadership in the total network storage market with 27.8% revenue share, followed by HP and IBM with 13.2% and 12.3% revenue share, respectively.

In the Open SAN market, which reached $2.5 billion and grew 9.3% year over year, EMC was the number 1 vendor with 25.0% revenue share, followed by HP with 15.4%. The NAS market grew 11.4% year over year to $668 million, led by EMC with 38.1% revenue share and followed by Network Appliance with 27.2% share. The iSCSI SAN market continues to show strong momentum, posting 43.9% revenue growth year over year, reaching $207 million in the third quarter. Network Appliance continues to lead the market with 20.5% share, followed by EMC with 18.0% share.

"Although the mid- and high-end pricebands performed well, the majority of networked storage growth was driven by the low-end price bands ($0K – $14.99K)," said Liz Conner, research analyst, IDC Storage Research. "The growth of low-end networked storage is being fueled by an increased understanding and confidence among SMB users who are seeking more effective solutions to manage an increasingly complex and expanding set of requirements related to data storage."

Top 5 Vendors, Worldwide External Disk Storage Systems Factory

Revenue, Third Quarter of 2007

(Revenues are in Millions)

Vendor 3Q07 Revenue Market Share 3Q06 Revenue Market Share 3Q07/3Q06 Revenue Growth

EMC $ 964 21.9 % $ 927 22.1 % 3.9 %

IBM $ 617 14.0 % $ 597 14.3 % 3.3 %

HP $ 589 13.4 % $ 589 14.1 % 0.0 %

Dell $ 409 9.3 % $ 347 8.3 % 17.9 %

Hitachi $ 374 8.5 % $ 340 8.1 % 9.9 %

Others $ 1,450 32.9 % $ 1,387 33.1 % 4.6 %

Total $ 4,403 100.0 % $ 4,188 100.0 % 5.1 %

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker,

December 6, 2007

Total Disk Storage Systems Market

In the total worldwide disk storage systems market, IBM and HP tie for the leadership with 20.0% and 19.6% revenue share, respectively. EMC maintained the third position with 15.3% revenue share.

Top 5 Vendors, Worldwide Total Disk Storage Systems Factory

Revenue, Third Quarter of 2007

(Revenues are in Millions)

Vendor 3Q07 Revenue Market Share 3Q06 Revenue Market Share 3Q07/3Q06 Revenue Growth

IBM $ 1,260 20.0 % $ 1,257 20.8 % 0.2 %

HP $ 1,239 19.6 % $ 1,235 20.4 % 0.3 %

EMC $ 964 15.3 % $ 927 15.3 % 3.9 %

Dell $ 609 9.6 % $ 507 8.4 % 20.1 %

Hitachi $ 384 6.1 % $ 348 5.8 % 10.4 %

Others $ 1,854 29.4 % $ 1,776 29.4 % 4.4 %

Total $ 6,310 100.0 % $ 6,050 100.0 % 4.3 %

Source: IDC Worldwide Quarterly Disk Storage Systems Tracker,

December 6, 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.