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Enterprise storage ‘loses profits momentum’

Q3 even worse than anticipated

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It was a tougher than usual third quarter for the enterprise storage and switches vendors - and their resellers, channel consultancy Global Touch reports.

But in a bad quarter some are doing better - or less badly - than others, according to Channel Tracker, the quarterly survey of resellers, disties, systems integrators etc. produced by Global Touch. (The survey participants collectively account for $123bn sales a year, so they are a good snapshot of the market.)

For sequential quarter revenue growth (Q3, compared with Q2), US survey respondents indicated that
"HP/Compaq, IBM, Maxtor (MaxAttach), Quantum (Snap), and SUN (T3) were in-line with expectations. Brocade, EMC, Hitachi, and Network Appliance were below expectations.

In Europe it was a slightly different story with
"Brocade, HP/Compaq, Hitachi, Maxtor (Max Attach), and Snap (Quantum) were in-line with expectations. EMC, IBM, Network Appliance and SUN (T3) are extremely below expectations".

In Q4, Channel Tracker's US panel predict HP/Compaq, Maxtor, and Quantum will have strongest enterprise storage and switches revenue growth (up 10 to 19 percent) compared to CQ4, 01. European respondents call Q4 slightly differently, forecasting strongest growth for IBM and HP.

Corporate Paralysis

For the seventh quarter in a row, Global Touch's Channel Tracker Survey, is reporting customer delays and cuts over capital spending and stretched technology lifecycle replacements. Also Q4, traditionally a big IT spending quarter, with many corporates making sure they spend ther budget allocation for the year, looks less than promising, and resellers are cutting back their forecasts, in the face onf "continued corporate IT spending paralysis".

And if that wasn't tough enough, vendors are competing increasingly with their resellers, in the drive to hit targets. The spot channel - where brokers sell product below usual prices - is awash with equipment from enterprise storage and switch vendors, Global Touch reports. ®

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