Worldwide external controller-based (ECB) disk storage revenue totaled $15,2-billion in 2006, a 4,1% increase over 2005 revenue of $14,6-billion, according to Gartner. 

IBM overtook Hewlett-Packard for the No 2 position in 2006, increasing worldwide ECB market share increased to 15,8%, while HP's market share dropped to 13,1%.
However, EMC maintained it convincing No 1 spot in 2006, as well as increasing its market share to 24,8% in 2006 compared with 23,4% in 2005.
Hitachi/HDS maintained its No 4 position with a market share of 9,5%. Dell and Network Appliance were No 5 and No 6 with 7,6% and 7,2% of the market respectively. Sun Microsystems rounded out the top vendors in the No 7 spot, finishing the year with a 6,1% market share.
Large vendors increasingly control a larger portion of the industry as consolidation continues, and effective marketing and channel partnerships strengthen their relative positions in the market.
In 2006, the top seven vendors accounted for 84,2% of worldwide ECB revenue, up from 81,5% of total sales in 2005. In the fourth quarter of 2006, the top seven vendors market share totaled 85,2%, up from an 83,6% market share in the fourth quarter of 2005.
"Inorganic growth via vendor acquisitions was a hallmark of storage activity in 2006," says Donna Taylor, principal analyst for Gartner's global Storage Quarterly Statistics program. "Private equity investment in the storage industry also offered alternative financing with which to fund them."
Network Appliance experienced the strongest growth among the top-tier vendors, with 21,7% revenue growth in 2006 and 36,6% revenue growth in the fourth quarter of 2006. Network Appliance is within striking distance of its closest competitor, Dell, whose year-over-year revenue growth was only 3,5%.
In the fourth quarter of 2006, Network Appliance experienced the greatest revenue growth at 36.6 percent year over year, while Sun Microsystems grew its revenue by 29,7% during the same period. Dell, however, experienced the greatest revenue decline, dropping 38%.
Hitachi/HDS overtook the No 4 position from Dell in the fourth quarter of 2006 compared with one year ago. Hitachi/HDS gained a percentage point due to the success of its TagmaStore products. While Dell lost 1,3 percentage points, NetApp's 36,6% revenue growth was enough to gain almost one percentage point.
IBM gained market share of 2,1% to finish the year at 19,4%. Strong sales in its NAS and midrange products contributed to IBM's revenue growth of 17,3% year over year.
External controller-based disk storage revenue in the Europe, Middle East and Africa (EMEA) region totaled $4,7-billion in 2006, a 4,2% increase over 2005 revenue of $4,5-billion. EMC maintained the No1 spot as well as increasing its market share to 24,1% market share and exhibiting a year-on-year growth of 10,9%. IBM and Hewlett-Packard were in the second and third spots with shares of 18,6% and 18,4% respectively. The top three vendors' market share accounted for 61,1% of the market in 2006, up from 59,2% market share in 2005.
"An overall 4,2% revenue growth for the ECB market in EMEA is consistent with worldwide results," says Robin Burke, vice-president: research at Gartner. "Margins and pricing continue to come down to meet users' demands, forcing the ECB vendors to provide more value for their money.