For the first time in as many quarters, a new report shows that worldwide sales of external disk storage systems experienced double digit growth, offering a strong indication that companies have loosened their IT purse strings and begun purchasing new equipment.
Worldwide external disk storage systems sales posted year-over-year growth of 17.1 per cent, totaling US$5 billion in the first quarter of 2010, according to the IDC report, released today.
The total disk storage systems market, which includes disk drives in servers, grew to $6.7 billion in revenues representing 18.8% year over year growth in Q1. Total disk storage systems capacity shipped reach 3,397 petabytes, growing 55.2% year over year, according to IDC's Worldwide Quarterly Disk Storage Systems Tracker.
IDC analyst Steve Scully said it's been a while since external storage systems sales has experienced double-digit growth. For example, in the previous quarter, external disk storage systems suffered a 4% drop in overall sales, he said.
"It is a huge turnaround," he said.
Scully said there were a number of reasons for the huge swing in disk sales, not the least of which was that after cutting back on spending since Q4 of 2008, companies had reserves to begin buying new equipment.
"Clearly you can't define it as a trend based on the quarter but you certainly see strength continuing in a broad sector of vendors and product families. It's certainly an indicator that at this point people are looking to increase their IT spend," Scully said.
The network-attached storage (NAS) market is one standout among external storage system sales, Scully said, with a broad array of purchases being made by companies looking to manage huge growth in unstructured, file data.
The NAS market grew 44.6% year over year, led by EMC with 45.1% revenue share and followed by NetApp with 26.9% share. The iSCSI SAN market continues to show strong momentum, posting 45.7% revenue growth compared to the prior year's quarter. Dell led the market with 36.9% revenue share, followed by NetApp with 14.4%.
In the overall external storage market, EMC remained number one in sales with 24.6% of the revenue share followed by IBM and NetApp in a statistical tie with 11.7% and 11.1% of the market, respectively. Hewlett-Packard and Dell ended in the fourth position in a statistical tie with 10.2% and 10.1% market share, respectively.
Scully said NetApp's shift from its previous fourth place to a tie for second with IBM was a remarkable turnaround based not only on increased NAS sales, but their unified storage offerings, which include the capability to storage block and file level data within the same array.
"They made a big move with a strong year over year growth of 47%," Scully said.
The total open networked disk storage market, which includes NAS and open/iSCSI storage area networks, grew 26.3% year over year in the first quarter to $4 billion in revenues. EMC continues to hold the number 1 position in the total open networked storage market with 28.7% revenue share, followed by NetApp with 13.7% revenue share.
In the Open SAN market, which grew 20.3% year over year, EMC was the leading vendor with 22.2% revenue share, followed by IBM and HP in a statistical tie for second with 14.0% and 13.5% share, respectively.
"The first quarter saw a resurgence in previously declining segments," Liz Conner, IDC's senior research analyst for storage systems, said in a statement.
"In Q1 and the prior quarter, vendors introduced higher-end storage systems aimed at specific use cases such as data deduplication, storage tiering, and database storage. The high demand for storage in these use areas, coupled with the improving economic conditions, have led to 16.2% year-over-year growth in the high end segment," she said.
Natalya Yezhkova, research manager for storage systems at IDC, said the worldwide disk storage systems market is off to a strong start in Q1 2010.
"Although the market declined in Q1 2010 compared to Q4 2009, the decline was lower than usual. This is a positive sign, suggesting increased storage budgets and continued demand for storage solutions," she said.