worldwide External Controller-Based Disk Storage Market Grew 4 Percent in Second Quarter 2006

Gartber: worldwide external controller-based (ECB) disk storage revenue totaled $3.6 billion in the second quarter of 2006, a 4.3 percent increase over the same period a year ago.

EMC maintained the No. 1 spot finishing the quarter with 23.8 percent of the market (see Table 1). IBM and Hewlett-Packard were locked in a tight race for second and third place this quarter, respectively. IBM maintained its worldwide ECB market share at 14.6 percent, while increasing its revenue by 4 percent year-over-year. HP’s market share (also at 14.6 percent) fell by 1.5 percent year-over-year. Hitachi/HDS maintained its No. 4 ranking with an 8.3 percent share of the market, while increasing its revenue by 5.8 percent year-over-year. Sun Microsystems took over the No. 5 spot with 7.6 percent market share, just barely ahead of Dell and Network Appliance, both at 7.5 percent.

Network Appliance experienced the strongest growth year-over-year among the top-tier vendors, with 22.2 percent revenue growth. Sun’s revenue growth of 13.8 percent year-over-year continues to be primarily the result of its acquisition of StorageTek in the third quarter of last year.

Table 1 worldwide External Controller-Based Disk Storage Vendor Revenue Estimates for 2Q06

(Millions of U.S. Dollars)

Company	2Q06 Revenue	2Q06 Market Share (%)	2Q05 Revenue	2Q05 Market Share (%)	2Q05-2Q06 Revenue Change (%)
EMC *	859.2	23.8	824.1	23.8	4.3
IBM	526.7	14.6	506.3	14.6	4.0
Hewlett-Packard	526.7	14.6	519	15.0	1.5
Hitachi/HDS **	300.9	8.3	284.5	8.2	5.8
Sun Microsystems	275.6	7.6	242.2	7.0	13.8
Dell	271.4	7.5	255.5	7.4	6.2
Network Appliance	271.0	7.5	221.8	6.4	22.2
Others	574.2	15.9	603.6	17.5	-4.9
Total	3,605.7	100.0	3,457	100.0	4.3

Note* EMC revenue excludes OEM revenue from Dell and Fujitsu Siemens. Note ** Hitachi/HDS revenue excludes OEM revenue from HP and Sun Microsystems. Source: Gartner Dataquest (September 2006)

Smaller vendors continued to see their market share erode, as the Others category experienced a revenue decline of 4.9 percent in the second quarter. The top 7 vendors accounted for 84.1 percent of worldwide ECB revenue in 2Q06, up 1.6 percent from last year.

worldwide External Controller-Based Disk Storage Publ 20060907