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Volume 4, Number 9 -- March 13, 2007

IBM Tops HP in Latest Gartner Disk Array Ranking, Both Trail EMC

Published: March 13, 2007

by Timothy Prickett Morgan

One of the reasons why Hewlett-Packard bought Compaq more than six years ago was to get its hands on its lucrative and large server business; the other was to get its hands on Compaq's disk array business, which had an even more dominant piece of that pie. For years, HP has outsold IBM in the disk array business, but in 2006, according to research by Gartner, Big Blue finally surpassed HP to take the number two spot in the external RAID disk array market.

IBM is, however, well behind EMC in this space, and HP may or may not have beaten out IBM in the overall disk array market, which includes internal disk arrays as well as external boxes.

According to the Gartner analysis of 2006's external RAID disk array sales, EMC brought in just under $3.8 billion in direct sales, not including OEM sales through Dell and Fujitsu-Siemens. EMC boosted sales of these disk arrays by 10.4 percent compared to 2005's sales levels, giving it 24.8 percent of the market. IBM sold $2.4 billion in external RAID disk arrays, growing by 13.2 percent and giving it 15.8 percent of the market. Both EMC and IBM grew their revenue share. HP, which saw sales decline by 7.7 percent to just under $2 billion, last 1.6 points of market share, falling to 13.1 percent of the revenue pie. Hitachi came in fourth, with $1.5 billion in sales (up 5.1 percent), followed by Dell, with $1.2 billion in sales (up 3.5 percent), Network Appliance, with $1.1 billion in sales (up 21.7 percent), and Sun Microsystems, with $930 million in sales (up 12.5 percent). Other players accounted for $2.4 billion in sales, down 10.7 percent. The total market accounted for $15.2 billion in sales in 2006, up 4.1 percent.

Whatever problems HP has in the external RAID disk array market, it was hit particularly hard in the fourth quarter of 2006, when sales fell by 12.5 percent to $514 million. IBM didn't just inch by HP in the final quarter of 2006--it blew by it with a mighty wind, with sales of $836 million, up 17.3 percent. EMC grew by 8.1 percent, breaking through the $1 billion market. Dell shrank by 10.6 percent to $331 million, and Sun grew more modestly by 2.6 percent, hitting $230 million. Hitachi had $411 million in sales in the quarter, growing smartly by 15.8 percent, almost matching IBM's growth. NetApp had the highest growth, growing by 19.7 percent in the quarter and posting $290 million in sales. At this rate, NetApp will pass Dell (which has most of its revenues through a reseller agreement with EMC). The external RAID disk array market amounted to $4.3 billion in revenues in the fourth quarter, up 3.8 percent.



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Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik, Kevin Vandever,
Shannon O'Donnell, Victor Rozek, Hesh Wiener, Alex Woodie
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