EMC is expected to lose the most market share in mainframe storage where IBM is expected to gain the most market share, but the numbers below suggest more strongly that most of EMC's revenue decline outside of the mainframe market can be attributed mostly to deferred spending. For example, there is anecdotal evidence that many of EMC's SAN installed base deferred the expansion of SANs across the enterprise and instead focused their dollars on adding Celerra and Clariion NAS products, which carry lower ASPs, to existing SANs.
Again, here are the market share numbers in context. The Server market is expected to be down at least 24% YoY while the Storage market is expected to be down at least 19% YoY. The Software market (operating systems, middleware, applications) is expected to post only 6% growth YoY instead of the expected 12%. That makes sense since applications drive the sale of infrastructure.
Within the overall storage number, NAS ($1.85B) is expected to grow by nearly 14%. The overall SAN market ($6.25B) is expected to grow by only 5% but Open System SANs (~$4.25B) are expected to grow by 12% while Mainframe SANs ($2.00B) are expected to decline by around 16%. The growth of networked storage necessarily means a rapid decline in the growth of internal disk storage, host-controlled external storage (JBODs) and direct-attached storage (DAS) since the overall storage market is expected to decline this year. This shift will show up more clearly also in the Storage Software numbers of EMC and IBM since networked storage systems pull in more storage software dollars than traditional storage systems.
For the third or fourth year in a row, EMC is the only vendor expected to get more than 5% share of the SAN and NAS markets with 38% of the SAN market and 42% of the NAS market for an overall NIS share of 39%. IBM is the vendor closest to joining EMC with an estimated SAN market share of around 18% and an estimated NAS market share of around 4%.
IBM has traditionally done well during the first year of its mainframe upgrade cycle, but its addressable mainframe market has shrunk from around 25,000 sites in 1990 to less than 2,000 sites today so IBM's progress in networked storage next year will depend more heavily on its ability to support servers and storage from its main rivals, an acknowledged weak point that shows up in the numbers below
These are all based on interim IDC numbers which are usually revised in late January. IDC, for example, shows EMC ending up with only $3.7B in Storage Hardware revenue in 2001, but EMC has already posted $3.5B in Storage Hardware revenue through the first 9 months of this year so EMC's numbers -- as well as that of the other vendors -- will probably be jacked up in the early 2002 report with the relative performance of each vendor intact, give or take up to 3 points for seasonality and last-minute adjustments.
In any case, there's a good chance that EMC is going to end the year strong and ended up losing only 3 or 4 overall market share points instead of the estimated 6 market share points for storage hardware the year BUT still gain 5 or 6 market share points in Storage Software. Before the cost-cutting measures taken in 3Q01, Storage Hardware carried a gross margin of around 30% while Storage Software carried a gross margin of around 85%.
Total SAN Market
Source: 11/1/2001 IDC Interim Report
2000 2001
EMC 40% 38%
IBM 10% 18%
CPQ 19% 18%
sub-total 69% 74%
Others 31% 26%
Total 100% 100%
Total NAS Market
Source: 11/1/2001 IDC Interim Report
2000 2001
EMC 32% 42%
NTAP 45% 32%
IBM 2% 4%
sub-total 79% 78%
Others 21% 22%
Total 100% 100%
External RAID-Controller Based Factory Revenue
Source: 11/1/2001 IDC Interim Report
2000 2001 % In Revenues
EMC $ 5.6B $ 3.7B (33%) ($ 1.9B)
CPQ 3.2B 2.7B (15%) ( 0.5B)
IBM 1.7B 2.2B 27% 0.5B
HWP 1.4B 1.2B (12%) ( 0.2B)
SUNW 2.5B 1.1B (56%) ( 1.4B)
HDS/HIT 1.5B 1.7B 14% 0.2B
Others 6.0B 5.1B (15%) ( 0.9B)
Total $ 21.8B $ 17.7B (19%) ($ 4.1B)
OS390
Source: 11/1/2001 IDC Interim Report
2000 2001 % In Revenues
EMC $ 902M $ 428M (53%) ($ 474M)
IBM 590M 821M 39% 231M
HDS/HIT 480M 365M (24%) ( 115M)
HWP 75M 29M (62%) ( 46M)
CPQ 8 6M (25%) ( 2M)
Others 111M 77M (30%) ( 34M)
Total $ 2.2B $ 1.7B (20%) ($ 500M)
Unix
Source: 11/1/2001 IDC Interim Report
2000 2001 % In Revenues
EMC $ 3.3B $ 2.2B (33%) ($ 1.1B)
SUNW 2.5B 1.1B (56%) ( 1.4B)
HWP 1.1B 1.0B ( 5%) ( 0.1B)
IBM 1.0B 1.2B 16% 0.2B
CPQ 734M 604M (18%) ( 0.1B)
HDS/HIT 582M 876M 51% 0.3B
Others 2.2B $ 1.9B (14%) ( 0.3B)
Total $11.3B 8.8B (22%) ($ 2.5B)
NT/Windows 2000
Source: 11/1/2001 IDC Interim Report
2000 2001 % In Revenues
CPQ $ 2.1B $ 1.8B (15%) ($ 0.3B)
EMC 1.4B 1.1B (21%) ( 0.3B)
HWP 233M 188M (20%) ( 45M)
IBM 102M 172M 68% 70M
HDS/HIT 52M 94M 80% 42M
SUNW 12M 5M (59%) ( 7M)
Others 2.2B 2.0B (10%) ( 0.2B)
Total $6.1B $5.4B (12%) ($ 0.7B)
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