the 10 biggest storage companies in 2005? - StorageSearch.com names them.
by Zsolt Kerekes
editor - April 2003 |
Which companies are going to be
the winners in the enterprise storage market of the future?
This long range
forecast predicts the top 10 storage companies, by revenue, in 2 years time
- at the end of 2005. | |
The
Top 10 Biggest (revenue) STORAGE companies in 2005
note - these are
listed in alphabetic order. |
| company |
products |
notes |
| Dell Computer |
storage
systems |
Unlike most
other US computer manufacturers, Dell was profitable and still growing fast
through the recession of 2002. In February 2003 - Dell ended its fiscal 2003
by posting best-ever quarterly product shipments, revenue and operating profit
in the period ended Jan. 31. Quarterly revenue was $9.7 billion, up 21% percent
from the previous year.
Revenue from external storage systems
increased 87% year-over-year.
In April 2003 - Dell announced that it
has begun manufacturing Dell/EMC CX200 storage systems worldwide. This carries
on from the successful reseller agreement which Dell signed with EMC in October
2001. |
| EMC |
storage
systems and software |
During 2002,
EMC continued the trend of halving its revenue compared to the $9 Billion peak
it achieved in FY 2000. This was confirmed on April 8, 2003 when EMC announced
preliminary financial results for the first quarter of 2003 within the range of
$1.35 billion and $1.4 billion.
Meanwhile the company claimed that it was maintaining its lead
position in the storage market. In March 2003 - EMC said it was the world's
#1 provider of networked information storage (Open SAN and NAS) and external
RAID systems once again in 2002, according to market share data by research
firm IDC.
How do EMC's bullish claims match up to the reality?
I long
ago came to the conclusion that EMC was losing most market share, to small and
medium size storage vendors which do not get listed at all in most market
research studies. Hundreds of storage companies outside the top 10 list have
been nibbling away at the customer bases of EMC and HP during the last 2 years
which is why the storage revenues of these market leading companies have
declined at the same time that total storage spending has increased. They're
still storage market leaders, but they sell less than they used to.
Later... - EMC Bounces Back
Hopkinton, MA
- April 15, 2004 - EMC Corporation today reported strong, double-digit
revenue growth and triple-digit net income growth on a year-to-year basis for
the first quarter of 2004.
Total consolidated revenue for EMC's first quarter was $1.87 billion,
35% higher than the $1.38 billion reported for the first quarter of
2003. Net income for the first quarter of 2004 was $140 million. This compares
with net income of $35 million for the first quarter of 2003.
...EMC profile
Editor's
comments:- EMC's revenue peaked at $9 Billion in FY 2000 and it looks like it
will pass that milestone in the coming year. To give the company credit, after
being hit hard by the dotcom crash, EMC reengineered itself, took out costs and
invested in major partnerships with Dell (in the US) and Fujitsu Siemens (in
Europe) which means it now has a much stronger launching point to take
advantage of the upturn in US IT spending. EMC's growth rate may actually
accelerate - because during the recession many users switched to lesser known
storage brands to save cost. If market optimism returns - then the strongest
storage brands - EMC, HP and IBM could benefit the most. |
| Fujitsu |
RAID, flash
memory, hard drives and other diverse storage products |
For the 12
months ending March 31, 2003, Fujitsu had estimated revenues of $39 Billion.
In August 2002, Fujitsu signed up as a reseller of EMC storage.
The
company seems to have stopped renaming its subsidiaries. I commented to one of
their PRs that the first press release I usually got from a Fujitsu company was
usually that were setting up the new company. The second press release would be
to say that they were closing it down and renaming it again. This was very
confusing.
Despite that Fujitsu's Softek is one of the world's top 10
storage software companies, measured by revenue. Other parts of the company
manufacture hard drives, optical drives, flash memory, and mainframe class
storage.
If you imagine a spectrum of computer companies ranked
according to marketing hype, then at the bright end heading into the ultra
violet end of the spectrum you would get Sun Microsystems, while at the other
end, in the infra red you would get Fujitsu. Fujitsu has a good reputation for
supplying reliable products, but the company seems to lack the marketing killer
instinct. Or maybe that's why conservative buyers like the company. |
| Hitachi |
disk drives,
RAID |
For the fiscal
year ended March 31, 2002, Hitachi, Ltd.'s consolidated sales totaled 7,994
billion yen ($60.1 billion).
In a $2.05 billion acquisition, Hitachi
Global Storage Technologies commenced operations on January 1, 2003, integrating
IBM's HDD production and marketing bases with Hitachi's U.S. HDD sales division.
Hitachi Data Systems' Lightning RAID got a respray and new engine in
January 2003. This is big storage - which provides total usable system capacity
of 128TB in a RAID-5 configuration.
In March 2003 EMC and Hitachi,
Ltd. buried the hatchet and announced the settlement of all pending patent
infringement litigation. Hitachi (which has a tarnished history involving the
copying of US technology and being sued about it) agreed to make some
undisclosed payments to EMC. The companies also agreed to swap API's to help
with compatibility issues for joint customers. |
| HP |
services,
optical storage, RAID, tape, storage software etc |
When two of
the top ten storage companies HP and
Compaq merged into one,
the resulting company became assured of a permanent entry in this list. However,
integration problems at the new HP were cited by some storage suppliers as
the reason for their own declines in revenue. In September 2002 HP said its
storage revenue was down 15% year over year.
Despite those short term
setbacks, there had been some financial successes from the HP / Compaq merger,
although mostly among the lawyers who took part, and the analysts who sagely
commented.
Computer industry buffs got a new book to read:- "Back-Fire",
by Peter Burrows (ISBN 0-471-26765-1) published in 2003, which provided an
unauthorized biography of Carly Fiorina as the backdrop to the merger and legal
shenanigans.
Personally, I was anti the merger when it was announced.
But after reading this book I got a reminder just how far the old HP had
drifted away from being a world class company. They needed a good hard kick up
the derriere. Fiorina has given them that, and without her, HP would now be a
basket case. HP still has problems. But they are in remission. |
| IBM |
storage
services, RAID, tape libraries, memory |
IBM has been
selling off a lot of production capacity during the last year or so, including
its HDD business to Hitachi.
In December 2002, market research company
ITSMA reported
that over 90% of decision makers are unable to recall more than 3 top
storage brands:- EMC, IBM and HP.
With a brand strength like that, IBM
could if it wanted to, feasibly stop all storage manufacturing altogether and
still make it to this top 10 list as the world's biggest storage reseller.
|
| Intel |
flash memory,
iSCSI HBAs, GBICs and RAID controllers |
If you looked
at Intel's web site during the first quarter of 2003 you would still have to
search hard to find the word "storage". Intel still gives the
impression of being a storage company in stealth mode. The foundations of
Intel's listing here are its flash memory and RAID controller business units.
As
I predicted in
January 2001
Intel confirmed in a recent developer roadmap (February 2003) that it will put
RAID onto PC motherboards. Intel's Canterwood chipset which will be introduced
in the first half of 2003 will support Hyper-Threading Technology and have new
features such as integrated Serial ATA/RAID.
In April 2003 Intel
announced that it has shipped its 2 billionth flash memory unit It took
Intel 12 years to ship its first billion discrete flash units and only three
more years to ship the next billion discrete flash units. As flash goes into
more mainstream products this growth will accelerate.
Also in April
2003, Intel announced that it was working with
Emulex on storage
focused I/O processors which would integrate Serial ATA, Serial Attached SCSI
(SAS) and Fibre Channel interfaces within a single architecture. The products
would emulate the protocols and software architecture of Emulex's Service Level
Interface (SLI) technology which is already used in over 1 million fibre channel
HBAs. |
| Maxtor |
disk drives |
With only $3.8
billion revenue in 2002 Maxtor is the smallest company in this top 10 list. But
hey - Maxtor's revenue is still more than twice the size of
VERITAS Software - so "small"
is relative...
What Maxtor is doing, seems to be of great interest to
STORAGEsearch readers. Maxtor was the #2 most visited company profile by our
readers in 2002 .. In
January 2003 Maxtor announced it had returned to profitability.
In
February 2003, Maxtor announced that it would build a new manufacturing
facility in the Suzhou Industrial Park in Suzhou, China expected to be completed
in the second half of 2004. (Hopefully by then, we'll all be imune to SARS.)
Looking
ahead there are new applications which will significantly increase the worldwide
usage of hard disk drives. In consumer products disks are becoming more common
in digital cameras and digital video recorders. And new IT applications such as
disk to disk to disk backup
could nearly double demand for disk storage. Maxtor is well placed to benefit
from those trends. |
| Seagate Technology |
disk drives |
For the
nine-month period ended March 28, 2003, Seagate reported revenue of $4.93
billion. That means Seagate has now overtaken EMC in annualized storage revenue.
Seagate
claims that in FY2002 it shipped more enterprise drives than Maxtor, Fujitsu
and IBM combined and that its storage revenue was 33% greater than Maxtor.
|
| Sony |
optical
drives, NAS, tape drives, tape libraries, and miscellanous storage |
Sony doesn't
disclose its storage revenue, but in 2005 I think it will be about midway up
this top 10 list.
In March 2003, in case there were still any
doubters about Sony being more than just a maker of pretty portable gadgets and
storage peripherals Sony staked its claim at the very top end of the storage
food chain with the announcement of its PetaSite systems. These are expected to
set a new standard for automated tape storage density with up to 250TB of native
capacity per square meter of floor space, and a total native capacity of up to
1.2 petabytes (PB).
My own view is that the top end of the tape
library market is the only safe place to be. The mid range enterprise market
will eventually be replaced by disk to disk backup. That doesn't affect most
library makers, because many of them already have low cost SATA disk arrays
within their product lines. The main threat is to media manufacturers. But there
will always be a big niche at the high end where tape is more economic. Sony is
not taking any risks, and is just showing that it is perfectly happy to fill
that demand.
Commenting on the company's direction for this article,
Sony Electronics' Business Systems and Solutions Company Steve Baker, Vice
President, Tape Storage Solutions said "Sony is committed to the future of
tape and maintaining its viability as a leading storage platform. Looking
ahead, one of our primary visions is to complement rapidly growing disk
capacities. Our new SAIT format, with a native capacity of 500GB per cartridge
is on track to meet this goal. Above all, we are dedicated to our customers,
who span multiple industries and applications, and intend to stay one step ahead
of their needs."
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How much can you rely on a prediction
that's published 2 to 3 years before the financial reports come in?
You
can check for yourself my prediction for the top 10 storage companies in 2003,
which was published in
January 2001.
It was 80% accurate.
Two of the companies in that list failed to grasp
the storage nettle tightly enough:-
Cisco Systems and
Microsoft. Both have
had other things on their minds in recent years.
Survival was
uppermost in Cisco's thinking, after the bottom dropped out of the telecoms
market and left it with a shrinking customer base. Cisco has recently made
gestures of interest in the storage market, but their storage related revenue
doesn't yet qualify them for entry in a top 20 storage list, let alone this one.
After our publication date for this article, Cisco announced it had signed up
EMC as a reseller of its SAN switches.
Meanwhile during the last few
years Microsoft was fighting to avoid being broken up by anti-trust lawyers and
it would not have been prudent for the company to make aggressive moves to
dominate another market. Microsoft's Server 2003 OS launched in mid April may
give the company some hooks on which to hang a storage strategy.
Both
companies could make a comeback to this list in future years. But not yet.
Companies which dropped out of last year's top 10 list?
Compaq was the only company
which dropped out from last year's long range prediction, because it is now
part of HP.
How about the storage start ups?.
The
continuing recession in 2002 once again prevented any of the
VC funded storage startups
growing to a level where they could be considered as serious contenders for the
top 10 list. In fact the marketing efforts of many new storage companies was so
abysmal during 2002 that hey present little real threat to the top 20
established storage companies. This is such a competitive market it's doubtful
whether the VC industry as a whole will ever get a net payback on the billions
of dollars invested in this segment. However, the game is far from over. Some
smaller investments, in software companies, could still reap fruit. | |
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