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IDC survey

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With "just say no" the dictum for storage buying, IDC has estimated that total worldwide spending on external disk storage systems slumped to $13.3bn last year, down 24% on 2001.

That marks the second year in which disk sales have fallen heavily. In 2001, IDC now estimates that they fell by 21% - up on an earlier estimate of an 18% fall that year.

According to IDC, the rule for storage administrators has become "just say no to new capacity, and be more cost conscious when investing in other solutions for boosting storage utilization." The only good news is that according to IDC this will not last forever, and that between 2002 and 2006 external storage disk spending will show a CAGR of 1.1%

The clamp on corporate spending in 2002 was abetted by the continuation of the storage price war that began the previous year, and a growing trend for buyers to move away from high-end storage arrays towards mid-range devices. "Users not only continued to drive price concessions but, in many cases, have also moved from enterprise-class to modular [mid-range] storage products in a make-do-with-less attitude," IDC said.

As an example of storage administrators tightening belts on end-users, IDC cited limits applied by IT departments to email box sizes. Nevertheless, the fall in revenue came despite a 35% increase in the number of TB of new capacity purchased during the year.

Customers are using their existing hardware more efficiently by consolidating storage and servers, using storage networks, and buying aftermarket disks to fill empty internal server disk bays and external arrays, IDC said. Another factor is the continuing increase in the density of data packed onto the disks inside arrays, which is reducing the cost of storage in terms of dollar per megabyte. Including the effect of the price war, IDC estimates that the average price per megabyte fell by 40% last year.

IDC cited EMC Corp's slumping revenue as another factor for the overall revenue shrinkage. "As a top player in this market, EMC's performance has the ability to impact overall market results," the researcher said. 2002 was just as much an Annus Horribilis for EMC as 2001 was, as its revenue fell by 40% for the second year running.

In terms of market share, EMC was pushed out of the number one slot by Hewlett Packard Corp, which post-merger took pole position with an 18.1% share. EMC took second place with a 17.9% share, down from 21.9% in 2001. IBM took third place with 13.6%, up from 12.1% in 2001

© ComputerWire

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