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Storage Sales Up, Says Gartner

Gartner says Dell, NetApp, and to a lesser extent IBM lead rally after lackluster 2004

Worldwide external disk storage revenue grew 11 percent to $3.54 billion in the first quarter of 2005 after a sluggish finish to 2004, according to market research firm Gartner Inc. (see Gartner: Dell, NetApp Lead Storage Surge).

Gartner analyst Roger Cox says the first-quarter, year-over-year increase was in sharp contrast to the fourth quarter of 2004, when revenue crept up 1.2 percent from the previous year. He attributed the surge to continued rapid growth of Dell Inc. (Nasdaq: DELL) and Network Appliance Inc. (Nasdaq: NTAP), a rally by IBM Corp. (NYSE: IBM) around its new systems, and a mini-rally by Hewlett-Packard Co. (NYSE: HPQ).

While the top six storage vendors grew revenue over the same period of last year, only Dell, NetApp, and IBM gained market share. Dells revenue jumped 35.8 percent – more than three times the industry total – as its market share ticked up from 5.4 percent to 6.6 percent. Dell resells midrange storage from EMC Corp. (NYSE: EMC), which remained in the No. 1 spot while barely keeping pace with overall industry growth at 11.2 percent.

“Dell’s blowing everybody’s socks off,” Cox says. “It shows you the power of their go-to-market story. They’re investing in pre- and post-sales support, and that’s paying off for them.”

NetApp, which primarily sells NAS but has made gains in SAN revenue in recent quarters, grew its revenue 27.2 percent and increased market share from 5.2 percent to 6 percent. Cox says NetApp’s recent success is due to its offering file and block-level storage in the same system.

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