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Storage Financials Take a Dip

Normal seasonality, shifting relationships between vendors, a slowdown in storage spending... Analysts have had a field day this week second-guessing the reasons for storage vendors' crummy quarterly results.

Hitachi Data Systems had the best performance of the bunch, most of which sell through OEM partners. Its revenue, extracted from the SAN and NAS numbers reported by its parent Hitachi Ltd., fell 2 percent sequentially while growing 19 percent over the same quarter last year.

The sequential drop isn't huge considering there is almost always a drop off in storage revenues between the fourth quarter of one year and the first quarter of the next. But HDS had shown sequential growth in the first quarter of recent years.

"The reported modest sequential decline represents a first for [this quarter] in more than five years," analyst Aaron Rakers of A.G. Edwards wrote in a note to customers. Still, Rakers surmises that Hitachi won market share in the quarter from its main SAN rivals EMC and IBM.

Hitachi sells its own systems, but also sells high-end SANs through OEM deals with Hewlett-Packard and Sun Microsystems. The other vendors reporting were Emulex, FalconStor, LSI Logic, and Overland Storage, all primarily OEM vendors. Between them, their partners include most of the largest storage systems vendors and most of their results were soft.

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