The most striking aspect of IDC's latest quarterly disk storage systems report is the gap between revenue growth and growth in petabytes shipped.
Worldwide external disk storage systems factory revenues grew slightly in the final quarter of 2004, posting 1% growth over the fourth quarter of 2003, to $3.8 billion, according to IDC's Worldwide Quarterly Disk Storage Systems Tracker. Demand for disk storage systems capacity was strong, however, with 57.7% year-over-year growth in external disk storage systems petabytes.
The numbers suggest that storage pricing pressures persist. As IDC Storage Systems Program Manager Brad Nisbet put it, "average pricing remains competitive."
Nisbet said it is "encouraging to see continued acceleration in the annual growth rate for external disk storage systems petabytes, which grew 63% in 2004. With revenue accelerating, but at a slower pace, average pricing remains competitive during the ongoing influx of higher-capacity drives and applications."
Nisbet said there are two forces behind the continuing decline in cost per gigabyte: stronger sales of mid-range systems and higher-capacity drives such as serial ATA (SATA).
"Perhaps even more of an impact is that many of these mid-range systems, as well as even some lower-end products, are now offering the use of capacity-oriented drives such as ATA or SATA," Nisbet told Enterprise Storage Forum. "These higher-capacity, lower-cost drives are really driving the $/GB down, thus helping to fuel the growth of terabytes, but keeping revenue growth at bay."
The total disk storage systems market grew at a slightly higher year-over-year rate of 1.8% in the fourth quarter, as internal storage revenues grew faster than external storage. For the full year, the external disk storage systems market posted 4.7% revenue growth to $14.2 billion.
"The fourth quarter was the only quarter showing positive growth for internal disk storage systems during the year, largely due to strong server sales at the end of the year," Nisbet said.
EMC, Dell and NetApp Strong
EMC maintained its lead in the external disk storage systems market, with 22% revenue share, followed by HP and IBM, with 19.4% and 13.1% revenue share, respectively. Hitachi and Dell rounded out the top five, with 8.2% and 7.2%, respectively. Among the top five suppliers, EMC and Dell posted the strongest year-over-year revenue growth in the fourth quarter, with 15.2% and 13.4% growth, respectively.
For the full year, EMC took the number one position, previously held by HP, with 21.1% revenue share. HP and IBM followed with 18.7% and 12.6% share, respectively.
The total network storage market (NAS combined with open and iSCSI SANs) grew 11.6% year-over-year in the fourth quarter to more than $2.4 billion, the highest quarterly revenue recorded. EMC maintained its lead in the total network storage market, with 29% revenue share, followed by HP and IBM, with 23.7% and 11.2% revenue share, respectively. Network Appliance and Dell posted the strongest year-over-year revenue growth in the quarter, with 29.7% and 22.9% growth, respectively.
The top position in the open/iSCSI SAN market continues to be a tight race. HP and EMC, each with roughly 28% revenue share, were again locked in a statistical tie for the top ranking in the market, with just a 0.7% difference in market share. The open/iSCSI SAN market grew 10.9% year over year.
iSCSI SANs Keep Rocking
In the NAS market, which grew 14.7% year over year, Network Appliance led with 36.9% revenue share, followed by EMC with a 32.8% share. The iSCSI SAN market continued to show strong momentum, posting 32% sequential quarterly revenue growth. Network Appliance continued to lead the iSCSI SAN market with a 38.9% share, followed by EMC with a 25.6% share.
In 2004, the market for iSCSI SANs cleared $100 million, led by the adoption of mid-range systems priced between $15,000 and $150,000, said Natalya Yezhkova, senior research analyst at IDC Storage Systems.
"Open SAN and NAS also experienced a shift of revenue from high-end to lower price bands, driven by the continuing drop in prices on disk storage systems and more competitive product offerings," Yezhkova said. During 2004, all the major vendors added new entry-level and mid-range products, "often accompanied by more sophisticated software offerings previously available only on high-end systems."
In the total worldwide disk storage systems market, which includes both internal and external storage, HP maintained its lead with a 24.2% revenue share, followed by IBM with a 22.5% share. EMC maintained the third position with a 14.5% share. Dell and EMC posted the largest year-over-year revenue growth among the top five vendors during the quarter, with 15.8% and 13.4% points gained, respectively.
For the full year, the total disk storage systems market posted 3.2% growth to $20.9 billion. HP maintained its leadership with 23.6% revenue share, followed by IBM and EMC, with 20.6% and 14.3% revenue share, respectively.