For much of the 1990s Network Appliance (NetApp) enjoyed the runaway market leadership position in network attached storage (NAS) with easy-to-use and inexpensive file-sharing storage devices that plug into an Internet

Protocol (IP) network. More recently, however, its competitive landscape has changed beyond recognition as enterprise storage veterans – most notably EMC – have laid claim to its turf.

This trend culminated in 2001 when, for the first time, NetApp’s ceded the number one slot in NAS to EMC. According to figures from Gartner, NetApp’s share of the market dropped dramatically to 35% from 50% just a year before, while EMC’s market share jumped from 36% to 45%.

One of the reasons for NetApp’s precipitous drop in market share, says Gartner analyst Roger Cox, is that EMC had successfully pitched its high-end Celerra file server product to its vast install base of customers as an add-on to their Symmetrix high-end disk array infrastructures. Because these devices are more expensive than NetApp’s best-selling NAS products, EMC quickly pumped up its market share – at least in revenue terms. But the trend also shows that customers are seeking to buy much of their storage network requirements from a single supplier.

Despite this, NetApp continues to be a major force in the NAS market with its NetApp Filer range. In 2002, the company recorded revenues of almost $800 million – $566 million from NAS products. However, that was down from $1 billion in 2001.

NetApp’s stronghold in the market is at the low to mid-range, appealing to small- to medium sized businesses that want to invest in networked storage for file serving or email. But the company has also diversified, introducing a ‘nearstore’ product that act as a back-up staging post between disk systems and tape libraries, and a cache store to ensure frequently used data is always available.

However, if NetApp is not to lose further market share to EMC and others, it needs to establish a higher profile as a strategic storage partner within large organisations