EMEA External Controller-Based Disk Storage Market Had Double-Digit Growth in 2005

Gartner: External controller-based (ECB) disk storage revenue in the Europe, Middle East and Africa (EMEA) region totaled $4.6 billion in 2005, a 10.3 percent increase over 2004 revenues of $4.1 billion. IBM narrowed the gap between it and Hewlett-Packard for the number two position in 2005 (see Table 1). IBM's ECB disk storage market share in EMEA increased to 17.1 percent, while Hewlett-Packard's market share declined nearly two percentage points to finish the year with 20.7 percent market share. EMC maintained its leading position in 2005 as its revenue increased 14.7 percent, and its market share improved to 22.3 percent. Hitachi/HDS experienced a revenue increase of 29.7 percent, and its market share increased to 6.3 percent in 2005. Dell experienced the strongest growth among the leading vendors in the region, with a 46.1 percent revenue growth in 2005 and a 58.3 percent revenue growth in the fourth quarter of 2005. Dell's strong performance allowed it to move from the seventh position in EMEA revenue in 2004 to the sixth position in 2005. Large vendors are controlling a larger portion of the industry. In 2005, the top seven vendors accounted for 85.5 percent of EMEA revenue, up from 83.8 percent of total sales in 2004. In the fourth quarter of 2005, the top seven vendor's market share totaled 86.1 percent, up from 82 percent market share in the fourth quarter of 2004. Table 1 EMEA External Controller-Based Disk Storage Vendor Revenue Estimates for 2005 (Millions of U.S. Dollars)

Company	2005 Revenue	2005 Market Share (%)	2004 Revenue	2004 Market Share (%)	2004 -2005 Change (%)
EMC *	1,018.94	22.3	888.29	21.5	14.7
Hewlett -Packard**	943.40	20.7	934.48	22.6	1.0
IBM	779.87	17.1	641.30	15.5	21.6
Sun Microsystems	317.29	6.9	342.36	8.3	-7.3
Hitachi/HDS***	286.82	6.3	221.21	5.3	29.7
Dell	285.39	6.2	195.31	4.7	46.1
Network Appliance	272.04	6.0	245.19	5.9	11.0
Others	664.32	14.5	671.80	16.2	-1.1
Total	4,568.07	100.0	4,139.95	100.0	10.3

Note* EMC revenue excludes OEM revenue from Dell and Fujitsu Siemens. Note ** HPs 2005 market statistics reflect new, updated XP series revenue and EVA series revenue and unit guidance. Note *** Hitachi/HDS revenue excludes OEM revenue from HP and Sun Microsystems. Source: Gartner Dataquest (March 2006) In the fourth quarter of 2005, some of the leading vendors had significant growth rates in revenue compared to the corresponding fourth quarter in 2004. Dell and IBM led the growth charge with overall increases in revenue of 58.3 percent and 54.7 percent respectively (see Table 2). Along with Dell, IBM experienced a very healthy growth in the fourth quarter, boosting its total year-on-year revenue growth and challenging both EMC and Hewlett-Packard for the top leadership position in EMEA. While Network Appliance did not match these increases, its 15.2 percent year-over-year quarterly growth, fueled by its FAS3000, resulted in the company maintaining its market share total of 5.7 percent. Hewlett-Packard experienced a difficult fourth quarter as its revenue declined 7.8 percent in the fourth quarter. The company dropped to the third position with 17.2 percent market share in the quarter. Sun Microsystems experienced a revenue decline of 7.3 percent in 2005, however the company experienced positive fourth quarter revenue growth of 6.8 percent. Sun saw its revenue mix shift towards its midrange and data center arrays. Sun's acquisition of StorageTek in the third quarter of 2005 had a positive impact on revenue overall for the company in the latter part of the year, which softened its overall annual revenue decline. Table 2 see: Market Share: Disk Array Storage, All Regions, All Countries, 1Q05-4Q05

Publ 20060309