Global storage capacity has shown another increase with a 27.3 percent rise in capacity in 2008, however, this is a slowdown compared to previous years. What's more, vendors experienced a fall in revenue of 5.9 percent over the same period.
While the capacity increase was a sharp contrast to the falling revenue, total storage capacity had been rising 40 percent to 60 percent a year, according to IDC's storage systems research manager, Natalya Yezhova.
"This quarter there was a big hit from internal storage (storage within servers), which is tied directly to server sales," Yezhova said. "External disk storage system capacity was up 40 percent - still low compared to usual quarters. High-end storage suffered from being more impacted by a freeze in end-user spending and longer purchasing cycles."
Low-end and mid-range storage systems were less affected by the economic downturn, Yezhova said. And some even saw growth, as users are beginning to look at a variety of new mid-range storage systems that can meet growing storage needs while keeping costs in check.
"As many IT budgets are adversely affected by the current economic conditions, end users are looking for more economical ways to meet their growing storage needs," said Liz Connor, an analyst with IDC's Disk Storage System Tracker. "While delivering enterprise class functionality, [Fibre Channel] SAN systems fulfill many storage needs, but usually at a higher average price. Enter the world of iSCSI and NAS storage solutions."
IDC said worldwide revenues from external disk storage systems posted a decline of 0.5 percent compared to 2007 - with revenues totaling US$5.3 billion in the fourth quarter of 2008. For the quarter, total disk storage systems revenues hit $7.3 billion, a decline of 5.9 percent from the fourth quarter of 2007. IDC pointed to weakness in server systems sales.
EMC maintained its lead in the external disk storage systems market, with a 23.3 percent revenue share in the quarter, followed by IBM and HP with 15.7 percent and 13.0 percent revenue share, respectively. Dell ended the quarter in fourth position with a 9.3 percent share. Hitachi and NetApp were in a statistical tie for fifth, with 7.8 percent and 7.0 percent revenue share, respectively. Among the top five suppliers, Dell and HP posted the strongest quarterly revenue growth compared to the last quarter of 2007, with 10.0 percent and 5.8 percent growth, respectively.
In the Open SAN market, which grew 2.2 percent year over year, EMC lead with a 24.2 percent revenue share, followed by IBM with 16.5 percent. The NAS market grew 8.6 percent year over year, led by EMC with a 43.8 percent revenue share and followed by NetApp with 24.1 percent share. The iSCSI SAN market continues to show strong momentum, posting 61.6 percent revenue growth compared to the prior year's quarter. Dell led the market with 35.3 percent revenue share, followed by EMC with 16.8 percent.
Fibre channel SAN revenue saw a downturn in the final quarter of 2008, falling 3.2 percent year over year.
Yezhova said the current decline in Fibre Channel SANs is tightly linked to a decline in high-end storage sales. "Given that part of this decline is caused by (hopefully) short-term economic implications, we can expect FC SAN [sales to pick up] in later quarters," Yezhova said.