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EMC widens lead in storage market
By Bloomberg News
January 25, 2001, 3:55 p.m. PT
HOPKINTON, Mass.--EMC increased its lead in the corporate computer-storage device market in 2000 over rivals IBM, Compaq Computer and Sun Microsystems, research firm IDC said.
Based on revenue, EMC's share of the market for external storage systems rose to 26.1 percent, from 24.4 percent in 1999, the report estimates. No. 2 Compaq's share fell to 15.8 percent, from 18 percent, and Hewlett-Packard jumped to third place from sixth.
The market for these products, which store information in devices separate from computers, is expected to swell to $53.29 billion in 2004, from $33.93 billion in 2000, IDC said, as companies boost their capacity to hold and analyze electronic data. That potential has triggered intense competition among storage companies, analysts say, as they try to dethrone EMC.
"EMC has superior management and superior execution," said David Brady, a money manager at Stein Roe & Farnham, which owns about 1.5 million EMC shares. "They deliver products on time and with a suite of (hardware and software) solutions that no one else can rival."
Hewlett-Packard had 8.6 percent of the market, compared with 6.4 percent in 1999, IDC said. IBM's market share was unchanged at 8.3 percent. Sun's share rose to 7.5 percent from 7.1 percent. Compaq, the world's biggest maker of personal computers, and Sun, whose server computers power Web sites, weren't immediately available to comment.
In the part of the storage market known as open systems storage area networks, or SANs, EMC's market share based on revenue climbed to 30.9 percent in 2000, from 18.8 percent in 1999. Sun, which had 26.3 percent of the SAN market in 1999, fell to third place with 13.6 percent. Compaq's share fell to 16.1 percent from 18.7 percent.
In the market for Unix-based storage equipment, EMC's market share increased to 29 percent from 26.2 percent in 1999, IDC said. Sun's share slipped to 14.1 percent from 14.5 percent, while Hewlett-Packard's share jumped to 12.1 percent from 10.3 percent.
Compaq's share of the Unix market fell to 8.5 percent from 13 percent. IBM boosted its share to 9.1 percent from 8 percent.
In the small yet fast-growing market for network attached storage, or NAS, which gives companies quick access to frequently used files, leader Network Appliance's market share slipped slightly to 48.6 percent in 2000, from 49 percent a year earlier.
An IDC representative said the slight drop in Network Appliance's share may be misleading because the company's sales and profits have been rising. In November, the company said fiscal second-quarter profit and sales more than doubled from a year earlier.
EMC, which recently developed NAS storage products to compete more directly with Network Appliance, took 29.4 percent of the NAS market in 2000, compared with 24 percent in 1999. Dell Computer's NAS market share rose to 3.1 percent from 2.4 percent. Auspex Systems' share fell to 1.9 percent from 7.8 percent, IDC estimates.
"Despite recent concerns about an economic slowdown, given the importance of storage to core business processing, our long-term forecast remains unchanged,'' John McArthur, IDC vice president of storage research, said in a statement.
On Tuesday, EMC said fourth-quarter profit rose 49 percent and revenue climbed 40 percent. The company reiterated its forecast for revenue of $12 billion in 2001, compared with $8.87 billion in 2000.
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