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IBM Shark Sales Sink

It appears IBM Corp.'s (NYSE: IBM) new storage systems came out at the wrong time.

IBM last week announced new high-end and midrange systems that executives said could double the company's market share in external disk by 2008 (see IBM's New Shark Tale). Today, IBM announced another quarter of strong growth in midrange storage systems, while revenue on the high-end slipped (see IBM Revenues Up 9%).

IBM CFO Mark Loughridge blames the high-end declines on product transition. He says midrange disk growth of 27 percent year-over-year was offset by declines in high-end systems as customers anticipated our high-end storage announcements.”

Big Blue reported storage hardware revenues grew 5 percent overall, with disk systems down 1 percent. IBM's tape revenues increased 17 percent and Tivoli storage software ticked up 2 percent.

It's no mystery why IBM got its hopes up high for disk. When IBM rolled out its DS8000 high-end and DS6000 midrange systems October 12, SVP of the systems and technology group Bill Zeitler points out that IBM’s external disk market share doubled since it launched its mainframe Shark storage systems in 1999. Zeitler says he expects the DS8000 – the Shark’s successor – and DS6000 to result in another doubling of market share by 2008.

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