IDC: Disk-Storage Market at Five-Year Peak

Disk-storage systems revenue jumped 11.9 percent globally in 1998 compared to the previous year, reaching a five-year peak, according to a new study by market research firm International Data Corp.

More moderate growth of 8.4 percent is predicted by IDC for this year because the 1998 buying spree appears to be over and because companies will re-deploy storage space that had been given over to year 2000 computer bug testing. Corporations also are likely to continue delaying discretionary IT purchases until after Jan. 1 of next year. After 1999, however, IDC anticipates that disk-storage systems revenue will leap back to double digits.

The disk-storage systems market now has worldwide revenues of US$27.7 billion [B], IDC found in its Disk Storage Systems Year-in-Review bulletin. The top seven vendors, which have 67.9 percent of the total disk-storage systems market, picked up just .6 percent of a share last year. But IDC has forecast that those vendors will reach a higher combined market share this year as more companies require storage systems.

Compaq Computer Corp. captured 20 percent of the market, to overtake long-time leader IBM Corp. Compaq surged ahead with its acquisition of Digital Equipment Corp. The 20 percent market share amounts to $5.5 billion [B] in global revenue.

IBM dropped to second place with a 14.3 percent market share and global revenues of almost $4 billion [B], IDC found.

EMC Corp. remained in the third spot with 11.5 percent of the market in 1998. It registered 1.7 percent revenue growth and $3.2 billion [B] in annual worldwide disk-storage systems revenue. EMC also had its first $1 billion [B] quarter in the third quarter of last year.

Sun Microsystems Inc. came in fourth, like in 1997, and hit $1.9 billion [B] in global revenue, good for a 7 percent market share. Sun formed a Network Storage Division last year.

HP had a 6.6 percent share with $1.8 billion [B] in worldwide revenue for a fifth-place finish.

Due to the Japanese economy's downward slide and deep discounts, Hitachi Ltd. had flat revenue in 1998, IDC said. The company had 5.1 percent of the disk-storage market last year with $1.4 billion [B] revenue. Hitachi has to create a new distribution strategy apart from its current direct sales force, IDC said.

Dell Computer Corp. won a 3.4 percent share of the market with $946 million [M] in worldwide revenue and finished seventh. But Dell appears poised for growth because its shipments are overwhelmingly for Windows NT and NOS, operating environments that IDC predicts will have the highest growth rate in the disk-storage systems market from 1998 to 2002.

IDC, in Framingham, Massachusetts, can be reached at +1-508- 872-8200 or at http://www.idc.com/.

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