Outboard Disk Array Sales Keep Pace With Servers in Q1

June 20, 2011 Timothy Prickett Morgan

The server market did alright in the first quarter thanks to a rebound in spending on RISC and mainframe servers (including Power Systems machines from IBM running its quasi-eponymous IBM i operating system) and a desire by companies to install fatter boxes across the architectural board to support virtualization. Sales of companion external disk arrays, not surprisingly, also did well as companies continue to suffer from information constipation.

Storage arrays are not always refreshed at the same time as servers, but at this point in the evolution of servers, storage, and networks, it probably makes sense to get all the shiny new features for virtualizing these three parts of the IT infrastructure upgraded more or less in lockstep. Hence, storage array makers are raking it in even as the price of raw storage comes down and competition is heating up.

Gartner reckons that external controller-based (ECB) disk array sales amounted to just over $5 billion across all vendors in the first quarter of 2011, up 14.1 percent.

“Reflecting storage infrastructure refreshments, coupled with expanded deployments in virtualized server infrastructures, the larger block-access ECB disk storage market segment grew 10.6 percent year-over-year,” explained Roger Cox, research vice president at Gartner. “The block-access ECB disk storage segment currently represents 79 percent of the total ECB disk storage market.” File-access based ECB arrays, which accounted for the other 21 percent piece of the ECB pie, grew by 30 percent in Q1.

EMC keeps adding to its market share in this ECB subset of the overall disk array space, which includes JBODs as well as internal disk arrays tucked up inside of servers. EMC had $1.52 billion in revenues in the first quarter, up 24.2 percent from the year-ago period and giving it 2.5 points more market share. NetApp, which has been growing much faster than the market at large for several years now, has knocked pout IBM as the number two ECB array supplier. NetApp’s sales rose by 34.4 percent to $630 million, while IBM’s rose by only 12.2 percent, to $591.5 million. Those NetApp sales do not include OEM sales of its products through Big Blue.

Hitachi was also able to grow its market share in Q1, with sales up 22.4 percent to $487.1 million; these figures exclude OEM sales of Hitachi arrays to Hewlett-Packard and Oracle.

Speaking of HP, that IT giant did a little better than the class average, with ECB disk array sales in Q1up 16.1 percent to $483.4 million, which was helped by its acquisition of 3PAR. Even with its acquisition of Compellent, however, Dell’s external disk storage sales actually declined in the first quarter by 1.4 percent, to $389.7 million. Fujitsu did better in ECB arrays than it has in recent quarters, with sales up 24.7 percent to $178.9 million. Oracle, which has all but stopped reselling Hitachi disks in favor of its own ZFS Storage arrays, saw its storage sales plummet by 39.2 percent to $85.3 million.

After so many acquisitions in the past two years, it might seem that there aren’t any other disk array makers but the big boys, but dozens of other vendors tracked by Gartner accounted for $681.3 million in revenues in Q1, down 4.3 percent.