Www.idc.com Western European Disk Storage Systems Market Overview Eric Sheppard Program Manager,...

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Western European Disk Storage Systems Market Overview

Eric SheppardProgram Manager, European Storage System

AgendaAgenda

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 UpdateWestern 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


•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)

Key Trends



•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

Key Trends (continued)

Quarterly W.E. Disk Systems MarketQuarterly W.E. Disk Systems Market

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Market Revenue ($B)•Y/Y growth rates:

5.5% in CY2005 3.0% in 1Q2006 1.8% in 2Q2006

•Y/Y external only 7.8% in CY2005 7.9% in 1Q2006 7.9% in 2Q2006

•Y/Y internal only 1.4% in CY2005 -6.5% in 1Q2006 -9.6% in 2Q2006


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•Y/Y growth rates: 51% in CY2005 45% in 1Q2006 41% in 2Q2006

•Y/Y external only 63% in CY2005 55% in 1Q2006 56% in 2Q2006

•Y/Y internal only 34% in CY2005 25% in 1Q2006 15% in 2Q2006

capacity Shipments



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 SystemsW.E. External Disk Storage Systems

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SAN NAS External DAS

1H2005 1H2006

Market Revenue (€M)12.6% Growth

23.6% Growth

6.5% Decline

W.E. External Disk Systems Market Revenue by Installation EnvironmentW.E. External Disk Systems Market Revenue by Installation Environment

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1H2004 1H2005 1H2006

FC SAN External DAS NAS FICON SAN iSCSI SAN

iSCSI $33M

Market Revenue ($B)

iSCSI $17M




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



•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)

Key Supplier Trends

*Excludes sales through Dell



•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 SupplierWE External Array Factory Revenue by Priceband & Select Supplier

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W.E. External Disk Systems Supplier Revenue-Limited Suppliers ($M)W.E. External Disk Systems Supplier Revenue-Limited Suppliers ($M)

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No FSC quarterly data prior to 2005

W.E. External Disk Systems Supplier Revenue-Limited Suppliers ($M)W.E. External Disk Systems Supplier Revenue-Limited Suppliers ($M)

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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 ForecastWE Disk Storage Systems Forecast

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•Total capacity Shipments: 40% internal CAGR 55% external CAGR

•Total Market Revenue ($M): -4.1% internal CAGR 3.2% external CAGR

Price Pressure from: capacity optimized HDDs Market maturation Increase competition

Blade servers to accelerate market shift towards external arrays

WE Disk Systems Market Revenue GrowthWE Disk Systems Market Revenue Growth

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Total External Internal

WE External Disk Systems Market Revenue GrowthWE External Disk Systems Market Revenue Growth

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DAS SAN NAS Total Ext.

Networked storage 6.6% CAGR 2005-2010.

Fibre Channel remains the largest segment.

SAN growth acceleration partly from:

Market shift to blades Increased adoption

from <$50K arrays

iSCSI CAGR of 68% 1.5% of 2005

networked storage 15.8% of 2010

networked storage

WE Disk Systems Market Revenue by Installation EnvironmentWE Disk Systems Market Revenue by Installation Environment

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FC SAN DAS NAS FICON SAN iSCSI SAN

Top Storage Priorities In EuropeTop Storage Priorities In Europe

Source: IDC, 4Q2005

Which THREE of the following are your company's top priorities relating to storage for the next 12 months?

Responses

0 20 40 60 80 100 120 140 160 180

Consolidate isolated SAN islands

Deploy solutions for easier storage mgmt

Consolidate storage onto fewer platforms

Reduce backup windows

Enhance disaster recovery plans

Ensure data retention compliance

Reduce storage-related costs

Optimize disk utilization

Reduced recovery/restore times

Improve storage performance

Expand storage capacity

N: 508

The Business Content Expanding StorageThe 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 CostWW ATA Adoption Reduces Storage Cost

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SCSI/FC PBs ATA PBs Storage $/GB

SCSI/FC disk drives have been the mainstay throughout much of history

But there is an increasing presence of ATA storage in the datacenter. Why?

Surveys of data center managers continue to confirm that the majority of storage TBs do not need to reside on high-performance storage

Petabytes

WW HDD TB Shipments into Enterprise Storage Solutions by Type

WW Capacity vs Performance-Oriented DrivesWW Capacity vs Performance-Oriented Drives

The availability of large capacity, low-cost “good enough” storage will continue to attract the attention of IT managers.

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Capacity Performance

WE External Disk Systems Raw Capacity CostWE External Disk Systems Raw Capacity Cost

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# of TBs at 2005 Prices $/GB

$13.4K Buys 1TB

$13.4K Buys 7.5TBs

WE Disk Storage Systems ForecastWE Disk Storage Systems Forecast

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Ext. TB shipments to increase at a 55% CAGR

Who plans to increase their data centers 500%?

Who plans to increase their IT staff by 500%?

Managing this explosion in capacity remains a key challenge

Suppliers must focus on enabling improved efficiencies, but without comparable price increases

Look to services & software

Worldwide Storage Market Revenue by Technology & Compound Annual GrowthWorldwide Storage Market Revenue by Technology & Compound Annual Growth

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Storage Services

Disk Systems (Arrays)

Storage Software

Optical Automation

SAN InfrastructureTape Automation

Essential GuidanceEssential GuidanceThe 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

Please contact:

Eric [email protected]+44 (0)208 987 7220

Questions?Questions?

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