The latest storage numbers are in and -- big surprise -- storage spending is up.

Figures released from the Gartner show worldwide external controller-based disk storage revenue totalled US$3.2 billion in the second quarter, up 5.1 percent from the $3.1 billion recorded in the same period last year.

The figures also confirm what Hewlett-Packard officials admitted last month: The company had problems in its storage group during the quarter. While most other vendors saw their revenue increase, HP's revenue declined 8.5 percent to $532.5 million in the quarter from $582 million in 2003's second quarter. According to the report, HP was forced to cut prices on its EVA and MSA products in the second quarter because it was late to market with low-cost, high-capacity disk drives.

HP was not the only vendor to show a decline. Hitachi Data Systems saw sales decline 15.8 percent to $223.2 million from $265 million the previous year.As Hitachi is preparing a new product line, much of its decline can be blamed on the difficulty of selling the old product line. Sun Microsystems' storage revenue also fell, dropping to $260.2 million, down from $275 million the previous year. However, the report noted that Sun's revenue was the first quarter-to-quarter revenue increase in four quarters, adding a bright note to Sun's storage fortunes.

Topping the list in Gartner's survey was EMC, which had revenue of $745.6 million in the quarter, an increase 17.4 percent over 2003's $635 million. While HP held onto second place in the rankings, third-place IBM grew closer with its $427.6 million in sales, a 6.6 percent increase over 2003's $401 million.

Dell, Network Appliance, and StorageTek all showed healthy increases during the quarter. Dell's revenue grew 27.8 percent to 195.6 million, up from $153 million in 2003, demonstrating that its strategic partnership with EMC was paying off. Network Appliance showed strength in its new line of products with revenue growth of 28.1 percent. Network Appliance had sales of $184.5 million, up from last year's $144 million. StorageTek recorded sales of $42.9 million, a 26.2 percent increase over 2003's $34 million.

The large "other" category also increased, jumping 5.8 percent to $620.8 million in revenues, up from $587 million in 20