IBM moves into second place in storage hardware sales

IBM earns bragging rights for surpassing HP in 2006 storage hardware sales, though it still trails industry leader EMC, according to an industry report published yesterday.

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IBM earns bragging rights for surpassing HP in 2006 storage hardware sales, though it still trails industry leader EMC, according to an industry report published yesterday.

IBM's market share in the global external-controller disk storage market, based on revenue, grew to 15.8 per cent in 2006, while HP's share dropped to 13.1 per cent, pushing IBM to second place behind storage market share leader EMC, which grew its market share to 24.8 per cent last year.

"I think the records will reflect that it's been about 10 years since we passed HP," said Andy Monshaw, general manager of IBM storage. As recently as five years ago, HP had a 15-point storage market share lead over Big Blue.

Monshaw credited a refreshed product line, a focus on selling systems rather than individual products and increased selling to the SME market for IBM's results.

HP Chairman, CEO and President Mark Hurd acknowledged the weakness in his company's storage business during a presentation at a Morgan Stanley Technology Conference on 5 March.

HP's storage revenue grew only 3 per cent in its fiscal first quarter, ended 31 January, which Hurd attributed to the fact that much of its product line is tape storage, which is a declining business. However, sales of its EVA line of disk storage products grew 18 per cent in the quarter.

Hurd also said HP needs to expand its storage sales force. "We just don't cover enough accounts," Hurd said.

The rest of the storage sellers in the Gartner report, ranked by 2006 market share, were Hitachi Data Systems, 9.6 per cent; Dell, 7.6 per cent; Network Appliance, 7.2 per cent; and Sun Microsystems, 6.1 per cent.

Gartner noted that the storage market is increasingly dominated by the top players and is driven by industry consolidation, more effective marketing and strong channel partnerships. The top seven storage vendors accounted for 84.2 per cent of the market in 2006, up from 81.5 per cent in 2006.

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