Worldwide external disk storage systems factory revenues fell 13.6 per cent year-on-year to USD $4.2 billion in the first quarter of 2009 (1Q09), according to IDC.

For the quarter, the total disk storage systems market declined to USD $5.6 billion in revenues, an 18.2 per cent decline from the prior year’s first quarter.

Steve Scully, research manager, Enterprise Storage at IDC, said the results were driven by continued weakness in server systems sales.

He said total disk storage systems capacity shipped reached 2,146 petabytes, growing 14.8 per cent year over year.

"The disk storage system vendors are really seeing the impact of the global economic downturn in the first quarter revenues," he said.

"However, while total revenues declined year over year, the overall storage capacity shipped continued to grow.

"These contrasting results are due to a combination of currency implications, lower overall sales, shifts in product mix, and aggressive pricing actions."

Liz Conner, research analyst, Storage Systems, said that although the economic crisis was fully realized by the enterprise storage systems market in the first quarter of 2009, the quarter wasn’t without its bright spots.

"Entry-level price bands ($0K – $14.99K) showed 9.9 per cent year-over-year growth and the midrange price band ($15K – $49.99K) was flat year over year," she said.

This supported IDC’s belief that storage products are still in demand, according to Conner, adding that customer spending was trending towards more modular, price point options.

"In addition, the high-end price band ($300K-499.99K) saw a 14.5 per cent year-over-year growth as vendors discounted their very high-end products, shifting the ASV’s into lower price bands in order to meet the demand for high-end storage while accounting for reduced IT budgets," she said.

EMC maintained its lead in the external disk storage systems market with 20.7 per cent revenue share in the first quarter, followed by HP and IBM in a statistical tie for the second position with 11.5 per cent and 11.3 per cent revenue share, respectively.

Dell and Hitachi finished the quarter in a statistical tie for fourth place with 9.8 per cent and 9.4 per cent revenue share respectively.

The total network disk storage market (NAS Combined with Open SAN) had year-over-year growth of minus 12.5 per cent in the first quarter with more than USD $3.1 billion in revenues.

EMC continues to maintain its leadership in the total network storage market with 26.0 per cent revenue share, followed by NetApp with 12.0 per cent revenue share.

In the Open SAN market, which declined 14.3 per cent year over year, EMC lead with 21.9 per cent revenue share.

The NAS market declined 6.7 per cent year over year, led by EMC with 39.0 per cent revenue share and followed by NetApp with 28.7 per cent share.

The iSCSI SAN market continued to show strong momentum, posting 40.5 per cent revenue growth compared to the prior year’s quarter.

Dell led the market with 36.4 per cent revenue share, followed by EMC with 15.8 per cent.

Natalya Yezhkova, research manager, IDC Storage Systems, said price sensitivity was a big factor in the healthy growth of iSCSI SAN.

He said that was the only installation environment segment that ended the quarter in positive territory.

"While still a relatively small segment of the market, iSCSI SAN is the bright spot for end users and for vendors, as it helps end users to deploy network storage, often with enterprise-class functionality, at a lower price point than traditional FC SAN, and, thus, creates more selling opportunities for vendors," he said.

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