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Compaq top of the SAN tree

Sells more than Sun, EMC, IBM put together

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Compaq installs one in two storage area networks across the world. In other words it sell more SANs than its competitors (if you miss out 'others', a perennial favourite) put together.

In 2001, Compaq sold more than 24,000 SAN-attached storage units, equating to a 48.5 per cent market share, Gartner Dataquest estimates.

And SAN is the hotspot for the enterprise storage market - SAN-based storage will grow from 16.3 per cent of the total multi-user storage market in 2000 to 70.7 per cent in 2005, Gartner forecasts.

"The enterprise storage space currently is going through significant redefinition in terms of what customers are buying," according to Roger Cox, chief analyst at Gartner Dataquest.

"The much more restrictive direct attached storage (DAS) paradigm, where storage is directly attached to a server, is rapidly being displaced by the more flexible and cost-effective storage area network (SAN) paradigm. Companies that maintain clear leadership in the SAN arena will end up dominating the entire storage market."

Sounds like EMC, Sun et al need to get their paradigm skates on... especially EMC, the enterprise storage market leader overall, with 34 per cent share, according to Gartner - more than Compaq, Sun, HP and IBM put together. EMC is reducing prices and cutting jobs. But the performance of the server vendors in the SAN market, shows that it faces a considerable competitive threat.

Servers

The SAN market share figures shows once again why Compaq operates so-called "war-room" pricing on special bids for desktop PCs and servers, when up against the likes of Dell etc - whatever CEO Michael Capellas says in public about ducking out of the price war.

Compaq has no intention of letting cheaper PC suppliers cut across customer supply lines to reach lucrative storage business.

Compaq SANs may be a lot cheaper than traditional EMC-solutions. And the company is far bigger than hate-figure Dell (a measly three per cent in this marketplace. But there is still an awful lot of fat to cut from margins.

Dell is already playing the commoditising, price-cutting game in the departmental Network attached Storage (NAS) market (Story: Storage margins to shrink predicts Dell). It is only a matter of time before it takes the game up a notch into the more complex SAN arena.

SAN Supplier Unit Market Share, 2000 (Gartner Dataquest)

  • Compaq 49%

  • Sun 14%

  • EMC 11%

  • HP 7%

  • Dell 3%

  • IBM 2%

  • HDS 1%

  • Others 13% ®

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