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Storage Spending Slumps 18% In First Quarter

A combination of a worldwide recession, cutbacks in IT spending and falling prices produced an 18.2 percent decline in spending on disk storage system in the first quarter compared to a year ago, with overall revenue coming in at $5.6 billion, research firm IDC reported. Worldwide factory revenue for external disk storage systems fell 13.6 percent to $4.2 billion.

Still, the hunger for more storage capacity didn't shrink. IDC said vendors shipped 2,146 petabytes in disk capacity in the quarter, an increase of 14.8% over the previous year.

IDC research manager for enterprise storage Steve Scully attributed slump in revenue on the global economic downturn but noted the increase in shipped capacity. "These contrasting results are due to a combination of currency implications, lower overall sales, shifts in product mix, and aggressive pricing actions," he said in a statement.

All of the major storage vendors posted declines in revenue, double-digit declines in most cases, while Dell, Hitachi, EMC and NetApp saw modest gains in market share, according to the IDC Worldwide Quarterly Disk Storage Systems Tracker report.

Not all the news was bad, said Liz Conner, a storage systems research analyst at IDC. She said systems priced under $15,000 showed a 9.9 percent increase year over year, while systems priced between $300,000 and $500,000 generated year over year growth of 14.5 percent. That growth at the high end resulted from vendors discounting their top-of-the-line systems to "meet the demand for high-end storage while accounting for reduced IT budgets," she said in a statement. There was no growth in midrange systems that costs between $15,000 and $50,000, IDC said.

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