EMC Now Big Man On External Storage Campus - InformationWeek

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EMC Now Big Man On External Storage Campus

EMC blew past Hewlett-Packard at the end of 2004 to become the world's top seller of external disk-based storage.

EMC blew past Hewlett-Packard at the end of 2004 to become the world's top seller of external disk-based storage, research firm IDC said Friday.

For the year, EMC had nearly $3 billion in external storage revenues, up 18.4 percent over 2003, and accounting for 21.1 percent of the market. HP's external storage revenues, on the other hand, fell by 6.3 percent to $2.65 billion, while its market share dropped to 18.7 percent.

"This is the first time that EMC's surpassed HP since HP acquired Compaq in 2001," said Brad Nisbet, a program manager at IDC. "Before that, EMC owned the external market."

Add the $994 million in revenues from Dell -- most of which comes from Dell's sales of the CLARiiON arrays, such as the AX100, that Dell and EMC collaborated on to design and manufacture -- and EMC's share of the market jumps to over 28 percent.

"EMC is firing on all cylinders," said Nisbet. "They've made their investment in the mid-range, and it's paid off. And Dell's success is directly tied to EMC's. Dell's own PowerVault line is essentially flat. All Dell's energies are in the EMC arrangement."

While EMC was on the rise, HP slipped out of its three-year lead in external storage. However, Hewlett-Packard held onto the top spot in overall storage sales -- both external and internal disks -- for 2004 with sales of $4.92 billion and a market share of 23.6 percent. But even though HP touted its retention of first place, its numbers were down from 2003 by 5.6 percent.

IBM was the other big-time storage seller that saw its numbers fall off in 2004, said Nisbet. Big Blue's revenues for sales of external systems were down 4.3 percent during 2004 compared to 2003, and its fourth quarter sales were "dismal," he added.

"IBM did not have a strong fourth quarter, in large part because it announced the DS6000 and DS8000 storage systems, but they were delayed and not available," said Nisbet.

IBM's quarter-to-quarter slide at the end of 2004 was 8.7 percent in total storage sales, and 20.3 percent in external storage sales, according to IDC's figures. Where the Armonk, N.Y.-based giant sold $633 million in external storage during the fourth quarter of 2003, it only sold $504 million worth in the final quarter of 2004.

"EMC did benefit to some extent from IBM's delay, but by and large, they've been executing extremely well. Every quarter during 2004, EMC was up," said Nisbet.

During the year, EMC saw its storage sales increase by 26 (Q1), 19.8 (Q2), 16 (Q3) and 13.4 percent (Q4), Nisbet pointed out.

Other than EMC and its partner, Dell, the other vendor that did well in 2004 was the much smaller Network Appliance, Nisbet said. The Sunnyvale, Calif.-based manufacturer's revenues jumped 26.8 percent during 2004 to $726 million as it captured 3.5 percent of the total storage market.

Meanwhile, the long-running trend of slipping storage prices continued. The dollar cost per gigabyte of external disk storage was down 36 percent in 2004 over the previous year. In 2003, per-gigabyte prices fell 33 percent, after plunges of 40 and 43 percent, respectively, in 2002 and 2001.

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