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Eric Sheppard
Program Manager, European Storage System
Western European Disk Storage
Systems Market Overview
www.idc.com
Agenda
Market update
Market value ($ & €)
Capacity demand (TBs)
Historic networked storage trends
– FC, iSCSI, FICON, DAS, NAS
Supplier shares and trends
Capacity & revenue forecasts (2005-2010)
– External vs. internal
– FC, iSCSI, FICON, DAS, NAS
Essential guidance
Note: This is a branded view of the market
Western European Market Update
Demand for external disk systems remains strong
56% Y/Y TB growth 7.9% Y/Y revenue growth
Internal storage sales remain weak
Western European Disk Systems Market:
2Q2006
Key Trends
•Total Disk Systems Market:
– Y/Y TBs 40.7% (175.8PBs)
– Y/Y Dollars 1.8% ($1.77B)
– Y/Y Euros 1.1% (€1.41B)
•Total External Disk Systems Market:
– Y/Y TBs 56.2% (122.5PBs)
– Y/Y Dollars 7.9% ($1.22B)
– Y/Y Euros 7.1% (€972M)
•Total External RAID Disk Systems Market:
– Y/Y TBs 60.3% (110.6PBs)
– Y/Y Dollars 8.9% ($1.14B)
– Y/Y Euros 8.1% (€905.6M)
Western European Disk Systems Market:
2Q2006
Key Trends (continued)
•Networked storage comments
– Y/Y NAS 23.7% to $164.5M
– Y/Y SAN 12.9% to $718.3M
– Y/Y External DAS -6.7% to $337.1M
– 2Q2006 iSCSI up 127% (Y/Y) to $19.5M
•External Arrays by Priceband:
– $150K+: $463.0M -1.3% Y/Y
– $50K-$150K: $297.2M -1.6% Y/Y
– <$50K: $459.8M 27.9% Y/Y
Quarterly W.E. Disk Systems Market
Market Revenue ($B) Market Revenue (€B)
$2.2B $8.0 €1.8B € 6.5
€ 6.0
$2.0B $7.0 €1.6B
€ 5.5
$1.8B
$6.0
€1.4B € 5.0
$1.6B € 4.5
$1.4B €1.2B
$5.0 € 4.0
$1.2B €1.0B € 3.5
$4.0
€ 3.0
$1.0B €0.8B
$3.0 € 2.5
$0.8B €0.6B € 2.0
$0.6B $2.0
€0.4B € 1.5
$0.4B € 1.0
$0.2B
$1.0
€0.2B € 0.5
$0.0B $0.0 €0.0B € 0.0
2003Q1
2003Q2
2003Q3
2003Q4
2004Q1
2004Q2
2004Q3
2004Q4
2005Q1
2005Q2
2005Q3
2005Q4
2006Q1
2006Q2
2003Q1
2003Q2
2003Q3
2003Q4
2004Q1
2004Q2
2004Q3
2004Q4
2005Q1
2005Q2
2005Q3
2005Q4
2006Q1
2006Q2
3 Months Ending 12 Months Ending 3 Months Ending 12 Months Ending
Quarterly W.E. Disk Systems Market
Market Revenue ($B)
$2.2B $8.0 •Y/Y growth rates:
$2.0B 5.5% in CY2005
$7.0
$1.8B 3.0% in 1Q2006
$1.6B
$6.0 1.8% in 2Q2006
$1.4B $5.0
$1.2B
$4.0
•Y/Y external only
$1.0B 7.8% in CY2005
$0.8B $3.0
7.9% in 1Q2006
$0.6B $2.0 7.9% in 2Q2006
$0.4B
$1.0
$0.2B •Y/Y internal only
$0.0B $0.0
1.4% in CY2005
2003Q1
2003Q2
2003Q3
2003Q4
2004Q1
2004Q2
2004Q3
2004Q4
2005Q1
2005Q2
2005Q3
2005Q4
2006Q1
2006Q2
-6.5% in 1Q2006
3 Months Ending 12 Months Ending -9.6% in 2Q2006
Quarterly W.E. Disk Systems Market
capacity Shipments
200PB 700PB
•Y/Y growth rates:
650PB
51% in CY2005
600PB
45% in 1Q2006
550PB
150PB 500PB
41% in 2Q2006
450PB
400PB •Y/Y external only
100PB 350PB
63% in CY2005
300PB
55% in 1Q2006
250PB
56% in 2Q2006
200PB
50PB 150PB
100PB
•Y/Y internal only
50PB 34% in CY2005
0PB 0PB 25% in 1Q2006
15% in 2Q2006
2Q 3
3Q 3
4Q 3
1Q 3
2Q 4
3Q 4
4Q 4
1Q 4
2Q 5
3Q 5
4Q 5
1Q 5
2Q 6
6
'0
'0
'0
'0
'0
'0
'0
'0
'0
'0
'0
'0
'0
'0
1Q
3 Months Ending 12 Months Ending
Western European Market Update
Demand for external disk systems remains strong
56% Y/Y TB growth 7.9% Y/Y revenue growth
Internal storage sales remain weak
Networked (SAN & NAS) storage remains growth engine
72% of 1H2006 external array market revenue from networked storage
Support for Fibre Channel host connection is critical
W.E. External Disk Storage Systems
Market Revenue (€M)
$1.5B 12.6% Growth
$1.0B
6.5% Decline
$0.5B
23.6% Growth
$0.0B
SAN NAS External DAS
1H2005 1H2006
W.E. External Disk Systems Market
Revenue by Installation Environment
Market Revenue ($B)
$2B
$1B
$1B
iSCSI $17M iSCSI $33M
$0B
1H2004 1H2005 1H2006
FC SAN External DAS NAS FICON SAN iSCSI SAN
Western European Market Update
Demand for external disk systems remains strong
56% Y/Y TB growth 7.9% Y/Y revenue growth
Internal storage sales remain weak
Networked (SAN & NAS) storage remains growth engine
72% of 1H2006 external array market revenue from networked storage
Support for Fibre Channel host connection is critical
Hewlett-Packard is defending its installed base better
Inventory troubles at EMC helped HP increase its share gap
NetApp, Sun, Dell & HDS have comparable external revenue
Western European Disk Systems Market:
2Q2006
Key Supplier Trends
•HP was the largest external array supplier
– Total external sales grew 24.9% Y/Y, 11.6% Q/Q
– EVA sales $108M (+47% Y/Y, -3.4% Q/Q)
– MSA sales $96.4M (+5.3% Y/Y, 14.7% Q/Q)
– XP sales $79.4M (+43% Y/Y, 53% Q/Q)
•EMC second largest external array supplier
– Total external sales grew 4.5% Y/Y, -21% Q/Q
– Symm/DMX sales were $81.4M (+6% Y/Y, -23% Q/Q)
– Branded CX sales* were $54.1M (-21% Y/Y, -32% QQ)
•IBM Third largest external array supplier
– Total external array sales grew 7.3% Y/Y, 24% Q/Q
– DS8000 & ESS sales were $84.3M (-14.4% Y/Y, 60% Q/Q)
– DS4000 sales were $58.6M (74% Y/Y, 49% Q/Q)
– DS6000 sales were $6.6M (-32% Y/Y, 60% Q/Q)
*Excludes sales through Dell
Western European Disk Systems Market:
2Q2006
•NetApp: >8% external WE market share for the first
time
– $94.5M in total revenue (45% Y/Y, 9% Q/Q)
– FAS3000 $50.5M represented 53% of 2Q revenue
– FAS6000 minimal for 2Q
– FAS200 sales were $21M (13% Y/Y, 12% Q/Q)
•Sun increased external market ranking to #5
– STK added $15M to Sun’s 2Q06 sales
– Including STK, external sales grew 1.5% Y/Y, 53% Q/Q
– Excluding STK, external sales fell 17.8% Y/Y, grew 53% Q/Q
– Sun’s SE6000 & SE3000 declined 28% & 22% Y/Y respectively
– SE9900 declined 8% Y/Y ($23.1M)
•Dell’s external array ranking fell one spot to #6
– External revenue declined 16% Y/Y, 13% Q/Q
– Dell|EMC revenue was $48M (-18% Y/Y, -13% Q/Q)
– NAS revenue fell 60% Y/Y to $2.3M
WE External Array Factory Revenue by
Priceband & Select Supplier
HP EMC IBM NTAP Dell Sun HDS Others
$600M
$500M
$400M
$300M
$200M
$100M
$0M
1H'05
1H'06
1H'05
1H'06
1H'05
1H'06
1H'05
1H'06
1H'05
1H'06
1H'05
1H'06
1H'05
1H'06
1H'05
1H'06
$0K-$49.99K $50K - $149.99K $150K+
W.E. External Disk Systems Supplier
Revenue-Limited Suppliers ($M)
3 Month Quarters
$350M
$300M
HP
$250M EMC
IBM
$200M
NetApp
$150M Sun
Dell
$100M
HDS
$50M FSC
$0M
20 1
20 2
20 3
20 4
20 1
20 2
20 3
20 4
20 1
20 2
20 3
20 4
20 1
2
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
03
03
03
03
04
04
04
04
05
05
05
05
06
06
20
No FSC quarterly data prior to 2005
W.E. External Disk Systems Supplier
Revenue-Limited Suppliers ($M)
12 Month Quarters
$1,200M
$1,000M
HP
$800M EMC
IBM
$600M NetApp
Sun
$400M
Dell
HDS
$200M
$0M
1
2
3
4
1
2
3
4
1
2
3
4
1
2
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
03
03
03
03
04
04
04
04
05
05
05
05
06
06
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Western European Market Update
Demand for external disk systems remains strong
56% Y/Y TB growth 7.9% Y/Y revenue growth
Internal storage sales remain weak
Networked (SAN & NAS) storage remains growth engine
72% of 1H2006 external array market revenue from networked storage
Support for Fibre Channel host connection is critical
Hewlett-Packard is defending its installed base better
Inventory troubles at EMC helped HP increase its share gap
NetApp, Sun, Dell & HDS have comparable external revenue
Storage demand to remain strong through 2010
52% capacity shipment CAGR (2006-2010)
Price pressure to keep revenue growth moderate
Blade servers to accelerate market shift towards external, networked arrays
WE Disk Storage Systems Forecast
$8B 4.5 •Total capacity Shipments:
$7B 4.0 40% internal CAGR
55% external CAGR
3.5
$6B
•Total Market Revenue ($M):
3.0
$5B -4.1% internal CAGR
2.5
$4B
3.2% external CAGR
2.0 Price Pressure from:
$3B
1.5 capacity optimized HDDs
$2B
1.0 Market maturation
$1B
Increase competition
0.5
Blade servers to accelerate
$0B 0.0 market shift towards external
2004 2005 2006 2007 2008 2009 2010
arrays
Int. Revenue Ext. Revenue Exabytes
WE Disk Systems Market Revenue Growth
6%
4%
2%
0%
-2%
-4%
-6%
-8%
2006 2007 2008 2009 2010
Total External Internal
WE External Disk Systems Market Revenue
Growth
Networked storage 6.6%
15%
CAGR 2005-2010.
Fibre Channel remains the
10%
largest segment.
SAN growth acceleration
5%
partly from:
Market shift to blades
0%
Increased adoption
2006
2007
2008
2009
2010
from <$50K arrays
-5%
iSCSI CAGR of 68%
-10%
1.5% of 2005
networked storage
15.8% of 2010
-15%
networked storage
DAS SAN NAS Total Ext.
WE Disk Systems Market Revenue by
Installation Environment
$3.0B
$2.5B
$2.0B
$1.5B
$1.0B
$0.5B
$0.0B
2004 2005 2006 2007 2008 2009 2010
FC SAN DAS NAS FICON SAN iSCSI SAN
Top Storage Priorities In Europe
Which THREE of the following are your company's top priorities relating to storage for
the next 12 months?
Responses
Expand storage capacity
Improve storage performance
Reduced recovery/restore times
Optimize disk utilization
Reduce storage-related costs
Ensure data retention compliance
Enhance disaster recovery plans
Reduce backup windows
Consolidate storage onto fewer platforms
Deploy solutions for easier storage mgmt
Consolidate isolated SAN islands
0 20 40 60 80 100 120 140 160 180
N: 508 Source: IDC, 4Q2005
The Business Content Expanding Storage
Copies to provide protection and rapid restoration – example
remote DR data centers
Shift for older, more expensive, less efficient technologies
(paper, microfiche, Etc.) – example Electronic Medical
Records
Applications generating more complex data – examples -
CRM, ERP, Etc.
Copies used in data marts to generate value from historic
data – analytics, Etc.
Use of capacity hogging images and video – training, web
support, Etc.
Increased competitive intensity – global competition, speed of
new product introductions, lower margins
General unwillingness to get rid of anything
…and the impact?
WW ATA Adoption Reduces Storage Cost
WW HDD TB Shipments into Enterprise
Petabytes
Storage Solutions by Type SCSI/FC disk drives have been
3,000 $180
the mainstay throughout much
of history
2,500 $150
But there is an increasing
2,000 $120 presence of ATA storage in the
datacenter. Why?
1,500 $90 Surveys of data center
managers continue to
1,000 $60 confirm that the majority of
storage TBs do not need to
500 $30
reside on high-performance
storage
0 $0
1999 2000 2001 2002 2003 2004 2005
SCSI/FC PBs ATA PBs Storage $/GB
WW Capacity vs Performance-Oriented Drives
Capacity Performance
100%
Percent of Terabytes
80%
60%
40%
20%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010
The availability of large capacity, low-cost “good enough”
storage will continue to attract the attention of IT managers.
WE External Disk Systems Raw Capacity Cost
WE Disk Storage Systems Forecast
$8B 4.5 Ext. TB shipments to increase at
a 55% CAGR
$7B 4.0
$6B
3.5 Who plans to increase their data
centers 500%?
3.0
$5B
2.5 Who plans to increase their IT
$4B staff by 500%?
2.0
$3B Managing this explosion in
1.5
$2B
capacity remains a key challenge
1.0
$1B 0.5
Suppliers must focus on enabling
improved efficiencies, but without
$0B 0.0 comparable price increases
2004 2005 2006 2007 2008 2009 2010
Int. Revenue Ext. Revenue Exabytes Look to services & software
Worldwide Storage Market Revenue by
Technology & Compound Annual Growth
$40
Storage Services
$30
2005 Revenue ($M)
Disk Systems (Arrays)
$20
Storage Software
$10
Tape SAN Infrastructure
Automation
Optical Automation
$0
-5% 0% 5% 10% 15%
2005-2009 CAGR (%)
Essential Guidance
The storage industry must:
Provide greater flexibility in purchasing and expanding storage capacity
– Storage as a utility???
Provide a way to maximize useful storage capacity and leverage existing
storage resources
Enable reduction of ongoing administration costs in terms of staff, timeliness,
and quality
– Raw capacity costs may be decreasing, but mgt. costs are not.
Impact on storage solutions:
Increased storage solutions that support tiers of storage optimized to meet
specific requirements for performance, cost, capacity, and availability
Common data replication and migration capabilities that allow IT managers
to easily and intelligently move data between different classes of storage
Storage management solutions that centralize and automate provisioning,
expansion, and data protection tasks across heterogeneous systems
Questions?
Please contact:
Eric Sheppard
esheppard@idc.com
+44 (0)208 987 7220
