A recent report from IDC indicates that worldwide disk storage system sales for the quarter ended June 30 fell 5 percent from the year-ago quarter, from $8.09 billion to $7.68 billion, pulled down by a serious drop-off in sales of internal disk storage systems, from $2.08 billion to $1.73 billion. Sales of external disk storage systems dropped 0.8 percent, from $6 billion to $5.95 billion.
While IDC didn’t break out numbers for individual regions, Eric Sheppard, a storage analyst and the report’s author, said in a phone interview that geographic contrasts were dramatic. For instance, he said healthy sales in emerging markets, where companies are aggressively building out infrastructures, made up for declines in the U.S. and Japan, where storage system vendors are facing threats from alternatives such as Google and Amazon.
As a result, “the competition is a lot tougher in the mature markets,” Sheppard said. “Some of the demand may be moving toward the public cloud.”
In terms of the vendor landscape, the emphasis on more modular, flexible external storage systems has favored companies like EMC, the clear market leader, and NetApp, neither of which sells internal systems. Conversely, storage system pioneers IBM and HP, both of which depend heavily on sales of internal disk storage, saw their total revenue from disk storage systems plummet 17.1 percent and 16.5 percent, respectively.
That allowed EMC, with 24.2 percent of the total disk storage system market, to widen its leadership gap over No. 2 HP, with 16.9 percent. EMC’s dominance in the recent quarter was more pronounced among external disk storage vendors, with its 31.2 percent market share far outdistancing No. 2 NetApp, which captured 13.3 percent.
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Sheppard said he expects a rebound next year, by which time product refreshes from EMC, NetApp and others will drive new investment among enterprises, and thus growth for the vendors. What’s more, service providers around the country are making massive data center investments to keep up with their clients’ growing data needs, representing a potential growth area for disk storage system vendors, he said.
One other trend that’s evident in IDC’s research is a steady shift from storage area networks to network-attached storage. SAN sales, which still dwarf NAS sales by a nearly three-to-one ratio, were down 0.6 percent from a year ago, to $3.8 billion, while NAS revenue rose 2.5 percent to nearly $1.4 billion.
That shift is proving tricky for some vendors. Oracle, for instance, saw its small piece of the NAS market more than double, while its larger share of the SAN market fell by more than 20 percent. Meanwhile, IBM's share of the shrinking SAN market, in which it ranks a distant second behind EMC, rose by 2.1 percent while its small share of the growing NAS market, which is dominated by EMC and NetApp, shrunk by 42.5 percent.
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