Storage market on the up

Hewlett-Packard and IBM finished in a dead heat for the lead in overall storage revenue in the fourth quarter, with the industry as a whole doing better than expected, according to market researcher IDC.

In the fourth quarter of 2002, sales in the overall storage market totalled $5.4bn, up 12 per cent from the third quarter. The improvement meant that, for the full year, the storage market saw a 15 per cent decline in revenue, narrower than the 21 per cent drop forecast by IDC.

"The fourth quarter's results were similar to what we have seen in the server market," John McArthur, IDC group vice president, said in a statement. "We expect to see a return to more normal seasonal changes as companies have already made their major adjustments to storage spending."

Both IBM and HP had 25 per cent of the overall market in the fourth quarter. That marks a gain for IBM, which had 20 per cent of the market in the third quarter, compared with 27 per cent for HP.

EMC held the number three spot, with 11 per cent market share, up 1 percentage point from the prior quarter. Sun Microsystems, Dell Computer and Hitachi tied for the number four spot, each with roughly 5 per cent of the market.

As far as various segments of the storage market, the Storage Area Network (SAN) market outperformed the overall market, with 14 per cent sequential growth from the third quarter. HP led that market with 28 per cent of revenue, followed by EMC with 26 per cent of sales.

The Network-attached Storage (NAS) market posted a weaker 4 per cent sequential growth. Network Appliance held its number one spot in that market, with 36 per cent share, followed by EMC with 33 per cent.

In the overall network storage market, which includes both SAN and NAS, EMC held the top spot, with 28 per cent market share.

The storage market, which saw a number of fluctuations in market share during 2002, should see more of the same this year, IDC said.

"In 2003, vendors will continue to bring to market more compelling business and product strategies, including the introduction of new components and storage network technologies," Charlotte Rancourt, IDC research director, said in a statement. "As a consequence, we expect to see further fluctuation in vendor market share in 2003."

Ian Fried writes for CNET News.com.