Favorable Climate for Storage Spending Drives Continued Growth in Worldwide Disk Storage Systems Market,

Worldwide

IDC: Factory revenue in the worldwide external disk storage systems market grew 6.7% year over year to $3.8 billion in the first quarter of 2005, marking the eighth consecutive quarter of positive overall growth. The total disk storage systems market grew at a slightly lower year-over-year rate of 6.0% in the first quarter. Capacity continues to outpace overall revenue growth with external disk storage systems petabytes growing 58.6% year over year to 409 petabytes for the first quarter. The breadth of growth shows that demand for disk storage systems is on the rise, although seasonal variations caused first-quarter revenues to be less than fourth-quarter revenues. Storage spending is clearly trending upward as organizations strive to stay ahead of their information storage demands. After nearly two years of positive momentum, spending on storage systems, particularly those priced less than $300,000, continues to be a top priority in the ongoing efforts to expand and rebuild IT infrastructure.

Total External Disk Storage Systems

EMC maintained its lead in the external disk storage systems market with 21.4% revenue share, followed by HP and IBM with 17.7% and 11.5% revenue share, respectively. Hitachi edged out Dell for the fourth position with 9.1% revenue share while Dell ended the quarter with 7.7%. Among the top 5 suppliers, Dell and EMC posted the strongest year-over-year revenue growth during 1Q05, with 29.2% and 12.2% growth, respectively. An analysis of top storage systems vendors performance over the past several quarters suggests that partnerships are becoming an important component of their market strategies. This mutually beneficial approach allows each partner to offer more complete solutions for its customers and often opens a door to new market segments and leads to growth in revenue and market shares.

Network Disk Storage Systems

The total network storage market (NAS combined with Open and iSCSI SAN) posted 16.7% year-over-year growth in the first quarter to more than $2.3 billion. EMC continues to maintain its leadership in the total network storage market with 29.0% revenue share, followed by HP with 20.4%. Dell and Network Appliance posted the strongest year-over-year revenue growth for the quarter among the top 5 vendors, with 47.1% and 29.7% growth, respectively.

In the Open/iSCSI SAN, EMC became the clear leader in the first quarter with 26.7% revenue share, ending four consecutive quarters of sharing the number 1 position with HP. HP ended the quarter with 23.9% revenue share. Dell and IBM posted the strongest revenue share gain among the top 5 vendors, with 2.4 and 0.6 year-over-year share point gain, respectively. The Open/iSCSI SAN market grew 16.6% year over year, reaching nearly $1.9 billion.

In the NAS market, which grew 17.0% year over year, EMC led with 37.9% revenue share, followed by Network Appliance with 34.2% share.* (see Taxonomy Notes) The iSCSI SAN market continues to show strong momentum, posting nearly 22% revenue growth compared to the previous quarter (4Q04). Network Appliance continues to lead the market with 43.3% share, followed by EMC with 28.6% share. Worldwide Disk Storage Systems Tracker Publ 20050603