Worldwide External Controller-Based Disk Storage Market Grew 6.7 Per Cent in the Second Quarter of 2012

Worldwide external controller-based (ECB) disk storage vendor revenue totalled $5.5 billion in the second quarter of 2012, a 6.7 per cent increase from revenue of $5.1 billion in the second quarter of 2011, according to Gartner, Inc. The second quarter of 2012 was the 11^th  consecutive quarter of revenue growth, but fell shy of Gartner's expectation for a 7.9 per cent year-over-year increase. 

"Although the hard-disk drive (HDD) supply issues created by the October 2011 Thailand flood was no longer an impediment on meeting user demand, the economy in certain regions had a debilitating impact on vendor revenue in the second quarter of 2012," said Roger Cox, research vice president at Gartner. "In particular, the dour EMEA economy dampened year-over-year vendor revenue growth to just 2.6 per cent against a forecast of 7.4 per cent, while the slowing Asia/Pacific economy held year-over-year vendor revenue growth to 9 per cent, 7.1 percentage points lower than Gartner's forecast. Only the North American region and Japan met or exceeded our expectations in the second quarter of 2012." 

Three vendors — EMC, Fujitsu and Oracle — produced year-over-year revenue gains higher than the industry average (see Table 1). EMC leveraged its optimised-to-fit product strategy to increase its leading ECB disk storage platform market share to 33.3 per cent. Fujitsu is benefiting from a rebound in Japan as well as in EMEA where its Fujitsu Technology Solutions subsidiary produced improved results selling the Fujitsu Eternus-branded storage products. Relying on increased sales of the ZFS Storage Appliance, Oracle increased its year-over-year market share for the first time since it closed the acquisition of Sun Microsystems in early 2010.

Worldwide ECB Disk Storage Vendor Revenue Estimates for 2Q12 (Millions of US Dollars)

Company	2Q12 Revenue	2Q12 Market Share (%)	2Q11 Revenue	2Q11 Market Share (%)	2Q11-2Q12 Change (%)
EMC1	1,823.2	33.3	1,619.4	31.6	12.6
IBM	754.4	13.8	772.7	15.1	-2.4
NetApp3	605.5	11.1	649.3	12.7	-6.7
HP	513.6	9.4	495.4	9.7	3.7
Hitachi/HDS2	477.6	8.7	467.4	9.1	2.2
Dell	400.2	7.3	378.6	7.4	5.7
Oracle	105.5	1.9	92.7	1.8	13.9
Fujitsu4	83.1	1.5	64.9	1.3	28.0
Others	706.0	12.9	585.8	11.4	20.5
Total	5,469.2	100.0	5,126.1	100.0	6.7

Note 1: EMC revenue excludes OEM revenue from Dell and Fujitsu Technology Solutions.
Note 2: Hitachi/HDS revenue excludes OEM revenue from HP.
Note 3: NetApp revenue excludes ONTAP OEM revenue from IBM and Engenio OEM revenue.
Note 4: Fujitsu’s branded revenue does not include products sold under the EMC and NetApp brands.
Source: Gartner (September 2012)

Although Dell, HP and Hitachi/Hitachi Data Systems had positive year-on-year revenue growth, each fell short of the overall ECB disk storage market growth in the second quarter of 2012. With the separation from EMC behind it, Dell showed distinct strength with its Compellent and EqualLogic storage platforms. HP capitalised on its increased P10000 3PAR Storage System traction to offset declining EVA sales. As Hitachi/Hitachi Data Systems' modular ECB disk storage offering transitions to the new Hitachi Unified Storage (HUS) platform, Hitachi/Hitachi Data Systems relied largely on its high-end enterprise VSP to enable it to produce positive year-on-year revenue gains. With respect to the network attached storage (NAS) market segment, Dell, HP and Hitachi/Hitachi Data Systems have a weak presence, which hindered their respective ability to gain overall ECB disk storage market share. 

IBM and NetApp were the only two vendors to not achieve year-on-year revenue gains in the second quarter of 2012. Even though IBM's XIV and Storwize V7000 ECB disk storage platforms achieved a 28.2 per cent year-on-year revenue gain, they were unable to offset the deterioration in DS8000 and DS5000/DS3000 revenue. 

Of NetApp's three product families — FAS6000, FAS3000 and FAS2000 — only the FAS2000 series had a positive year-on-year revenue growth in the second quarter of 2012. The FAS6000 and FAS3000 fell off by 15.6 and 17.5 per cent, respectively, while the FAS2000 gained 16.5 per cent. Even though Asia/Pacific and Japan achieved gains of 18.8 and 19 per cent each, NetApp's revenue dropped more in the Americas than it did in EMEA. Mindful that the second calendar quarter covers two months of NetApp's first fiscal quarter, its weakest quarter, and that just one quarter is not a trend, Gartner said that NetApp is facing stronger competitive headwinds in small or midsize business (SMB), as well as the enterprise markets and that branded E-Series did not produce meaningful revenue.

Gartner ECB disk storage reports reflect revenue from new vendor-branded hardware only, as well as hardware revenue associated with financial leases and managed services. Optional and separately priced storage software revenue and storage area network infrastructure components and used ECB disk storage systems are excluded.

Additional information on the ECB disk storage market is available in Gartner's "Quarterly Statistics: Disk Array Storage, All Regions, All Countries, 2Q12 Update." The report includes vendor market share by data access method, price band, sales channel and operating-system segmentation. The report is available on Gartner's website at http://www.gartner.com/resId=2143917.