Worldwide external controller-based (ECB) disk storage revenue totaled $3,7-billion in third quarter 2006, a 7,4% increase over the same period of 2005, according to Gartner.

NetApp showed the strongest growth year over year among the top-tier vendors, with 20,4% revenue growth for the quarter. EMC maintained the number one spot overall, finishing the quarter at 25,5%.
Hewlett-Packard was the only vendor to lose revenue in the third quarter, dropping by 11,9%, while retaining the number three spot behind IBM. IBM maintained the number two spot with a market share of 14,8%, while increasing its revenue by 17,9% year over year.
Hitachi/HDS also experienced 17,9% revenue growth year over year, maintaining its number four ranking with a 10,8% share of the market. Dell and NetApp were at number five and six, respectively, each with a 7,3% market share. Sun Microsystems fell to the number seven spot with 5,3% market share.
The industry showed a dramatic increase in the sale of add-on storage capacity compared with the sale of new units.
"While a portion is attributable to seasonal fluctuations, the majority of the capacity growth is the result of buyer compliance with Sarbanes-Oxley regulations requiring not only data retention but retrieval as well," says Donna Taylor, principal analyst for Gartner's global Storage Quarterly Statistics programme.
Smaller vendors' market share continued to decline, a trend driven, in part, by industry consolidation, but also in response to Tier 1 vendor's product and marketing efforts in attracting new customers, while retaining their current clientele. The top seven vendors accounted for 83,5% of worldwide ECB revenue in the third quarter of 2006, up 2,1% from last year.
In the Europe Middle East and Africa region, external controller-based disk storage revenue totaled $1,1-billion in the third quarter of 2006, a 6.9% increase over the same period last year.
"The market has returned to growth and was largely driven by an increase in midrange disk array sales," says Robin Burke, research vice-president at Gartner.
EMC retained the leadership position growing 19% year on year, widening the gap with Hewlett-Packard, which recorded an 8,8% decline. IBM, NetApp and Fujitsu Siemens Computers all recorded significant year on year growth, at 26%, 29,6% and 59,3% respectively.
For the first time, Gartner separated Fujitsu Siemens Computers out of the "other vendor" category. Fujitsu Siemens Computers relies on reselling EMC and NetApp high-end products thereby resulting in a low market share based upon Gartner metrics. However, during the past few months the company has increasingly developed its own midrange, low end products and increased its EMEA revenue.
Gartner's external controller-based disk storage reports reflect hardware only revenue, as well as hardware revenue associated with financial leases
and managed services.