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Although S\storage systems revenue grew during the fourth quarter of 2011 and for the entire year, that growth slowed compared to previous periods.
According to IDC’s worldwide quarterly disk storage systems tracker, external disk systems (networked storage) increased 7.7% year-over-year to $6.6 billion in the last quarter of 2011. That compares to 16.2% year-over-year growth in the fourth quarter of 2010, and 10.8% growth in the third quarter of 2011.
For the full year, external disk storage revenue increased 10.6% in 2011 compared to 18.3% growth in 2010.
The rate of growth slowed across categories that IDC tracks – open SAN, NAS and iSCSI. SAN storage revenue grew 14.1% and iSCSI storage revenue increased 16.6% year-over-year for the fourth quarter of 2011, while NAS disk storage revenue actually declined by 1.2%. In the fourth quarter of 2010, SAN revenue grew 15.1%, iSCSI increased 42.1% and NAS grew 21.7%.
IDC senior research analyst Amita Potnis said growth slowed after picking up sharply in 2010 as the industry moved out of the recession. That significant increase in late 2010 made for difficult comparisons in 2011. Also, the cloud and storage efficiency technologies probably tempered sales. She said the hard drive shortage caused by the Thailand floods had little impact during the end of 2011, but is hurting sales this year.
“Two technology trends have had a big impact on the market,” she said. “If a storage system is sold to cloud service providers, we count it. But a significant amount of cloud storage capacity does not come from external storage system purchases, so that has an impact. Also, storage efficiency technologies such as deduplication, compression, virtualization and thin provisioning have a significant impact on the market. End users can adjust their buying strategies and use what they have more efficiently.”
Potnis said solid-state drives (SSDs) remain at below 10% of external storage system revenue.
NAS revenue declined despite research showing file storage is outpacing block storage growth. Potnis said NAS grew more than 40% in every quarter of 2010 and that growth rate was difficult to sustain in 2011.
“Also, the types of data on NAS devices – backup and archive – are main candidates for data deduplication and transfer to the cloud,” she said. “So the impact from cloud and storage efficiency is greater on NAS than block data. But we expect file data will continue to grow faster than application or block storage.”
IDC also reported the high-end segment – systems selling for $250,000 and up – had the highest growth rate of all price segments. High-end storage systems increased to 30% in the fourth quarter of 2011, up from 28.2% in 2010.
EMC extended its lead in external storage market share during the fourth quarter of 2011, growing 22.4% — nearly triple the overall growth rate. EMC’s revenue share was 29.4%, compared to 25.9% in the fourth quarter of 2010. IBM retained second place with flat revenue year-over-year, but its share dropped from 16.4% last year to 15.2%. NetApp slipped slightly ahead of Hewlett-Packard into third place, although IDC lists them as tied because they are less than one percent apart. NetApp grew 16.6% in the quarter for an 11.2% market share. HP revenue fell 3.8% in the quarter for 10.3% share. In the fourth quarter of 2010, HP had 11.6% share with NetApp at 10.3%. Hitachi Data Systems (HDS) was fifth last quarter, growing 11.6% for 9.2% share.
For the entire year, EMC increased external disk systems revenue 23.6% and increased its market share 3% in 2011 to 28.5%. IBM grew 8.9% over the year and stands second with 13.5%. NetApp grew the most for 2011 following an acquisition of LSI’s Engenio storage business, increasing revenue 23.7% to take 12.4% market share. HP grew 7.7% and slipped from a statistical tie with NetApp in 2010 to fourth with 10.7% in 2011. HDS grew 18.8% for the year and held 8.8% of the market. HDS overtook Dell for fifth for the year, as Dell’s revenue tumbled following the end of its OEM partnership with EMC.