Worldwide Disk Storage Systems Shows Buoyancy in the First Quarter of 2003, Driven by the Open SAN Market, IDC Says

FRAMINGHAM, MA – JUNE 6, 2003 – Worldwide disk storage systems factory revenue were $4.8 billion in the first quarter of 2003, down 1% compared with first quarter of 2002, according to IDC's Worldwide Disk Storage Systems Quarterly Tracker. This slight year-over-year decline was less than the 8% year-over-year decline that was shown in the fourth quarter of 2002, indicating a continued trend toward stabilization in overall market spending. The overall market was buoyed by strong sales in the Open SAN (Storage Area Network) market, which grew nearly 14% year-over-year in terms of factory revenue. Meanwhile, overall storage capacity continues to outpace revenue, growing nearly 49% year-over-year to 175.6 petabytes shipped during the first quarter.


"First quarter results continue to illustrate increased customer adoption of network storage systems (NAS and Open SAN)," said Charlotte Rancourt, research director of IDC's Disk Storage Systems program. "Network storage for the first time represents more than half (53% revenue share) of the total external disk storage systems market, up 5 points from a year ago. The traditional direct- attached storage systems represents 42% of total external disk storage revenue in the first quarter, down from 46% a year ago."

In the first quarter, HP led the total disk storage system market, with 26.3% revenue share, followed by IBM and EMC with 19.1% and 11.7% revenue share, respectively. Dell and IBM posted the strongest year-over-year growth during the first quarter among the top 5 vendors, with 37.5% and 16.8% respectively.

In the total external disk storage system market, revenue decreased 2.7% year-over-year in the first quarter. HP maintained it's number 1 position with 19.5% revenue share. EMC was number 2 with 17.4% revenue share. EMC and HP switch positions in the total external RAID market, where EMC led the market with 19.2% revenue share and HP followed closely with 18% revenue share.

EMC continues to maintain its leadership in the total network storage market (NAS combined with Open SAN) with 26.3% revenue share. In the Open SAN market, HP led with 27.9% revenue share followed by EMC with 24.5% share. In the NAS market, Network Appliance maintained its number 1 position with 37.3% share followed behind by EMC with 33.7% share.

"Once again, SAN attached arrays accounted for an increasing portion of the storage systems market in the first quarter," said Eric Sheppard, senior analyst of IDC's Disk Storage System Program. "This growth can be attributed to the strong end-user demand for solutions that enable efficient use of storage recourses."

Top 5 Vendors, Worldwide Disk Storage Systems Factory Revenue,

First Quarter 2003

(Revenues are in Millions)

Q1 2003 Market Q1 2002 Market Revenue Growth

Vendor Revenue Share Revenue Share 2002/2003

HP $1,260 26.3% $1,351 27.9% -6.7%

IBM $917 19.1% $785 16.2% 16.8%

EMC $559 11.7% $620 12.8% -9.8%

Dell $341 7.1% $248 5.1% 37.5%

Sun Microsystems $284 5.9% $313 6.4% -9.2%

Hitachi $284 5.9% $310 6.4% -8.5%

Others $1,156 24.1% $1,221 25.2% -5.3%

All Vendors $4,801 100.0% $4,847 100.0% -0.9%

NOTE: Data for Hewlett-Packard includes revenue for both Hewlett-Packard and Compaq.

Taxonomy Notes:

IDC defines a Disk Storage System as a set of storage elements, including controllers, cables, and host bus adapters, associated with three or more disks drives (direct attach storage device [DASD]/hard disk drive [HDD]). 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 productsto 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 foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research, and exposition company.

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