Disk Array Sales Grow by 10 Percent in Q3

Published: December 15, 2008

by Timothy Prickett Morgan

Well, the server business, as I told you last week, started to slow down in the third quarter as the economic flu spread around the globe and made companies sick enough to be afraid to spend as much as they might otherwise on servers. And thus far, storage sales are holding up a little better, at least in the third quarter.

According to statistics just released from Gartner, worldwide sales of external disk arrays rose by 10 percent in the third quarter to $4.26 billion, just a tiny smidgen less than the growth and sales level set in the second quarter. (These sales are for what Gartner calls controller-based external disk arrays, meaning it does not count integrated disk arrays sold in entry and some midrange servers or external disk enclosures that do not have controllers.) The fact that disk array sales held up in the third quarter is encouraging, since August and September in particular were not a good time for the economies of the world. The real test, of course, will be the fourth quarter. But, let's take heart where we can when we can.

"Maintaining double-digit growth year-on-year is significant given the current economic conditions," explained Robin Burke, research vice president for Gartner's global storage quarterly statistics program, who put out the numbers. "However, when comparing the second and third quarters of 2008, all regions showed single-digit negative growth. Worldwide growth was minus 4.5 percent sequentially while North America was minus 3.1 percent."

Notice how people can't seem to handle the word decline? Just say it, man. Disk sales fell sequentially in some geographies. And declining sales in the United States will not surprise anyone at this point.

On a year-over-year basis, the numbers don't look as bad. Sales of external disk arrays in Latin America grew by 15.8 percent in the third quarter; EMEA rose by 12.6 percent, Asia/Pacific by 11.5 percent, and Japan by 6.2 percent. Sales in North America even rose by 8.4 percent compared to last year's third quarter.

As has been the case for so long no one can remember when it wasn't true, EMC had the pole position in the external disk array market, with $1.11 billion in sales and 11.7 percent growth year-on-year. That gave EMC a 25.7 percent share of external disk array sales. Gartner reckons that IBM came in a distant second in this space, with $554.8 million in sales, down 1.8 percent. Hewlett-Packard showed 7/10ths of a percent of shrinkage, with sales down to $481.3 million in the quarter, but Hitachi posted $419.7 million in sales, up 10.7 percent. (Hitachi, of course, resells its high-end arrays to HP and Sun Microsystems, which rebadge them and get to count the revenue in their pockets.)

Dell had the fastest growth among server makers that also do storage, with sales up 12.6 percent in the quarter to $377.8 billion, followed by Network Appliance with $342 million in sales, up an impressive 21.1 percent. For all its storage talk, Sun only had $182.9 million in sales, up only 6.1 percent, followed by Fujitsu, with its $106.6 million, down 6.7 percent. All other vendors combined in the external disk array space garnered $685.7 million in sales, up 25.4 percent--clearly showing that there is room for innovation in the storage racket. Some small companies took some market share in the quarter, and it looks like they took it from IBM, HP, Sun, and Fujitsu, to be precise.

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