Disk Storage Systems market closes on flat year-end performance

For the full year, spending eroded 3% in dollar terms. However, the dollar gained during the year against European currencies with a negative growth impact — in euro terms, the market expanded 1.3% for the quarter and 4.6% for the full year, despite a fragile recovery of the European economy.

"Some of the quarterly results run against the general perception and indices of some of the major economies in Western Europe, with the U.K. and Italy recovering ground lost in previous quarters and Germany falling short despite its general strength," said Donna Taylor, research director for IDC's European Storage Group. "However, this is largely due to the cyclical nature of the enterprise storage market as well as the result of some key customers in stressed markets holding on to their budgets till the very end of the year."

Over the course of the year, hard disk drive pricing and supply have continuously improved. By the fourth quarter, the average dollar price of capacity dropped by 40% on an annualized basis, helping new capacity shipments to accelerate to over 37% growth rate, close to health historical norms. In the last three months of the year, customers bought 1.5 exabytes of new enterprise system capacity, not counting drives bought directly from the market.

Market Highlights
High-end storage systems sales (systems with an average selling price of $250k or above) were driven by refreshes and consolidation projects during the quarter, closing the full year with a flat performance. EMC, once again, out-executed most of the competition as it took advantage of accounts shifting towards bigger installations to reduce the number of management points. IBM successfully marketed its refreshed DS8000 offering, while HP penetrated the space even further with large 3PAR deployments targeted at dynamic, multitenant environments. Hitachi Data Systems lost share during the quarter due to the timing of some deals, however, it booked a healthy growth with VSP for the full year.

After a strong rally in previous quarters, demand for midrange systems (selling between $25k and 250k on average) cooled slightly. The growth leaders were NetApp FAS and IBM with its Storwize V7000 offering, while Hitachi leveraged its new midrange HUS platform to bounce back from previous lows, adding market share. HP lost out due to falling EVA sales despite a strong year-end deal as it is ramping its new midrange 3PAR platform — the result of which remains to be seen. Dell lost market share as EqualLogic sales shrank and Compellent has not managed to drive enough growth for the quarter.

"The results demonstrated once again that relevant products combined with focused sales execution led to growth and competitive market share gains in a highly challenging environment. Customers are increasingly conscious of the full cost structure of storage systems and the need for much more streamlined and agile storage operations," said Daniel Bizo, senior storage research analyst for IDC.