EMC's Preferred, Survey Says

IT managers aren't spending much, but nearly half of what they are shelling out could go chiefly to EMC Corp. (NYSE: EMC), according to the latest Goldman Sachs & Co. IT spending survey. EMC is the storage mindshare leader, while partner Dell Inc. (Nasdaq: DELL) is expected to pick up share fastest among storage vendors, the firm maintains.

EMC was named as preferred high-end storage vendor by 42 percent and the preferred midrange vendor by 32 percent of 100 IT managers surveyed by the firm in April. Dell was No. 1 on the low end, with 34 percent. Although Goldman Sachs conducts the survey every two months, the preferred vendor question was new to the April survey.

Also on the high end, IBM Corp. (NYSE: IBM) finished second to EMC with 31 percent of respondents voting the company as preferred. Hitachi Data Systems (HDS) was next with 10 percent and Hewlett-Packard Co. (NYSE: HPQ) fourth with 6 percent.

On the low end, Hitachi placed second to Dell with 28 percent of respondents preferring it, and IBM got a 10 percent turnout.

Dell and HP tied for second in the midrange area with 19 percent, followed by IBM with 14 percent, Network Appliance Inc. (Nasdaq: NTAP) with 9 percent, and Hitachi with 2 percent.Table 1: High-End Preferred Vendor

Table 2: Midrange Preferred Vendor

Table 3: Low-End Preferred Vendor

In the firm's survey summary, analyst Laura Conigliaro says HP deserves close watch in coming months due to a refresh of its storage line and the recent change in CEO (see HP Plans EVA Facelift, High Hopes in Palo Alto, and HP Plots New Course).

With new midrange product launches due from HP [on Monday, May 16], as well as a storage team invigorated by new management, we will look to changes in HP’s score as a possible indicator of the effectiveness of the company’s new storage message,” writes Conigliaro.Dell was the storage vendor most mentioned to gain share of IT spending dollars, moving up from fourth in the February survey. Dell switched places with NetApp from the previous survey, with EMC remaining second and IBM third.

Conigliaro attributed Dell’s rise to its partnership with EMC becoming stronger through the addition of a NAS reseller deal and low-end SANs (see Dell Adds a NAS and Dell Enters IP SAN Game). “Dell’s announcement that it will also sell some of EMC’s NAS offerings should bolster Dell’s standing in this category even further,” she notes.

HP received the most mentions for losing share of IT spending dollars, followed by Storage Technology Corp. (StorageTek) (NYSE: STK) and Sun Microsystems Inc. (Nasdaq: SUNW).

The survey found lowered expectations for IT spending growth for the second straight period -- no surprise following a quarter of generally poor earnings results (see Storage Spending Slips). The survey also showed weak spending forecasts, although high-end storage arrays, storage management software, and NAS systems were named as high-spending priority areas. NAS moved up from a medium priority in the previous survey to a high priority. Midrange and low-end storage arrays ranked as medium priorities.

Respondents expect a 3 percent increase in overall IT spending this year compared with last. Back in February, the respondents said they expected spending to be up 3.6 percent this year; in December 2004, they expected it to rise 3.9 percent.Respondents expect IT capital spending (equipment and software) to increase 2 percent, down from 2.9 percent in February and 3.7 percent in December. Only 19 percent said they expect spending to accelerate in 2005, down from 38 percent in February.

— Dave Raffo, Senior Editor, Byte and Switch