IDC: Q4 storage revenue drops at Dell, HP

EMC and IBM are riding high

Dell and Hewlett-Packard reported declines in storage hardware revenue in the fourth quarter of 2006, running contrary to a growth trend for the storage industry.

HP's external disk storage revenue declined 3.2 percent to US$658 million and Dell's dropped 8.8 percent to US$390 million in the fourth quarter, compared to the fourth quarter of 2005, according to data released Monday by IDC. The report showed double-digit gains by EMC, up 10 percent to US$1.06 billion, and IBM, up 15.5 percent to US$892 million.

The overall external disk storage market grew by 6 percent to $4.8 billion in the fourth quarter and 8 percent to $17 billion for all of 2006 compared to 2005. For the year, all of the top five storage vendors, including HP and Dell, posted revenue gains over 2005.

IDC attributes the overall growth to added demand for networked storage at companies with added requirements to save important files. IDC analyst Brad Nisbet noted the increase in network-attached storage, which he said is indicative of ongoing interest in file-related storage.

IBM held 15.1 percent market share based on full-year external disk storage revenue, edging out HP's 14.3 percent share, although IDC calls that a statistical tie because they are within one point of each other. But neither overtook EMC's number-one spot with 21.9 percent share.

HP's CEO, chairman and president Mark Hurd has acknowledged his company's weakness in storage, with revenue growing only 3 percent in HP's fiscal second quarter. Hurd blamed the weak performance on an insufficient sales force and the fact that most of its storage products are tape-based rather than disk-based.

External disk storage refers to storage disks that are in an appliance that is separate from a server in a data center. The total market includes internal disk storage, including the hard drive in a server, workstation or desktop computer.

EMC also topped competitors on storage software revenue in the fourth quarter and for the year.

EMC, which only sells storage hardware and software, not servers, cornered 27.9 percent of the storage software market in the fourth quarter, followed by Symantec's 18 percent, IBM's 12.1 percent, Network Appliance's 9.6 percent and HP's 5.4 percent.

Total industry storage software sales grew by 3.1 percent in the fourth quarter to US$2.6 billion and for the whole year, by 8.3 percent to US$9.8 billion compared to the previous year.

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Robert Mullins

IDG News Service
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