Factory revenues for disk-based storage systems continue to fall, according to market analysis group IDC. In the third quarter of 2002, overall revenues suffered a 3% decline. The network-attached storage (NAS) and storage area network (SAN) markets declined the most, posting 10% and 6% decreases respectively.
Hewlett-Packard, having grown its storage business substantially through its acquisition of Compaq in 2001, was the leader in revenue for the whole storage sector with a 27% share, followed by IBM, with a 20% share.
But increased competition has resulted in leadership changes in the networked storage markets. Network Appliance snatched back the leadership position in the NAS market with a 38% revenue share, pushing out EMC, which had led the sector for several quarters. EMC also lost the top spot in the SAN market, posting a share of 27% compared with HP’s 30%. Nevertheless, EMC maintains the lead in disk storage overall.
John McArthur, group vice president of storage research at IDC, warns that the declining revenue trend could be misleading, as many organisations have increased their levels of storage utilisation by consolidating existing storage systems onto networks. “Suppliers have to look beyond revenue to see that capacity growth of networked storage exceeds the growth of direct-attached storage,” he says.
However, the price of storage on a ‘cost-per-gigabyte’ basis continues to fall. “The third quarter is consistent with an emerging trend whereby growth in gigabyte per unit does not offset the unrelenting decline in dollar per gigabyte,” adds IDC.