The
Top 10 Biggest (revenue) STORAGE companies in 2006
note - these are
listed in alphabetic order. |
| company |
products |
notes |
| Dell Computer |
storage
systems |
The world's
largest computer maker outperformed the market by growing revenue and profit
throughout the recession, and there's no reason to doubt that the company will
reaps benefit from the IT market recovery too.
Dell had not reported
1st quarter revenue at press time but issued guidance to say the company
anticipates fiscal first-quarter sales to reach $11.4 billion, 20% better than
the same quarter one year ago
In an earlier quarter (ended Jan. 30,
2004 ) Dell reported that sales from PowerVault and Dell/EMC external storage
systems were running at a $1.8 billion annual run rate and that overall
storage revenue had grown 47%.
Dell is included in this list because
it's also the world's largest reseller of storage, which is bundled internally
in PCs and servers. In Q104 Dell shipped 7.68 million units of computer
systems - 16% more than its nearest rival. |
| EMC |
storage
systems and software |
At one stage
during the 2000-2003 recession it looked as though EMC's revenue might drop to
half its $9 billion peak. But then in April 2004 - EMC reported that revenue
had bounced back. 35% year on year growth took the quarter to $1.87 billion.
EMC signalled that it expects this high growth rate to continue.
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.
I
expect that EMC will comfortably surpass $10 billion annual revenue in the
period covered by this article. |
Hitachi GST
Hitachi Data Systems |
disk drives,
RAID |
Hitachi
markets storage products through 2 main subsidiaries Hitachi Global Storage
Technologies and Hitachi Data Systems.
Hitachi Global Storage
Technologies, founded in 2003, which makes hard disk drives. Hitachi GST was
formed as a result of the strategic combination of IBM and Hitachi's storage
technology businesses. In March 2004 Hitachi GST announced the world's
highest capacity 3.5" ATA hard drive, the 400GB Deskstar 7K400.
Hitachi
Data Systems is one of the world's top 10 makers of enterprise storage RAID and
SAN. Its products are badge engineered by Sun and HP. |
| HP |
services,
optical storage, RAID, tape, storage software etc |
For the
quarter ending Jan. 31, 2004 HP reported that its storage revenue had declined
2% year-over-year. Taking a realistic view of trends in tape storage, HP
decided to exit the OEM tape library business. Overall however, HP reported
quarterly revenue was up 9% to $19.5 billion fueled by PC and server sales.
I
expect HP's storage business to grow during 2004 because it has one of the
strongest storage brands and will benefit from customers switching back from
cheaper no-name storage products, which benefited most during the recession.
|
| IBM |
storage
services, software, RAID, tape libraries, memory |
For the
first-quarter of 2004 IBM reported revenue up 11% compared with the first
quarter of 2003 to $20.1 billion. IBM's Storage Systems revenues increased due
to strength in midrange disk and tape products. Revenues from Tivoli software
increased 18%.
Like EMC and HP, IBM stands to gain from the recovery as
buyers switch back to buying big brand storage.
The company continues
innovating.
In April 2004 - IBM announced a breakthrough
storage technology that is designed to help clients protect and recover critical
data at global backup locations at some of the fastest speeds available. Called
IBM Global Mirror for Enterprise Storage, the technology provides global backup
and recovery protection at speeds approaching those achievable at local
distances. |
| Maxtor |
disk drives |
In the 4
quarters leading up to publication of this article Maxtor reported revenue of
$4.19 billion.
During Q104 , Maxtor shipped 13.6 million hard drives.
IDE drive shipments in the first quarter totaled 12.8 million, including
1,549,000 to consumer electronics OEM customers. SCSI drive shipments were
828,000 compared with 854,000 in the fourth quarter of 2003.
Although
there is more competition now in the hard disk drive market than in recent
years, the IT market recovery and growing applications for HDDs in consumer
applications should provide a positive outlook for manufacturers. |
| Micron Technology |
RAM and flash |
In the 4
quarters leading up to publication of this article Micron reported revenue of
$3.7 billion.
The RAM market goes from boom to bust every couple of
years or so and the 2000-2003 recession was a bad time for RAM manufacturers
with pricing at half the level it is now (Q204). But better times are coming,
the Semiconductor Industry Association expects RAM sales to grow 43% in 2004.
Anticipating
improved market consitions, in November 2003 Micron announced the
groundbreaking of a new DRAM memory module assembly and test facility in
Aguadilla, Puerto Rico. The 48,000-square foot facility will house advanced
technology DRAM module assembly and testing for a wide range of high-density,
high-speed memory, including next generation DDR2 based SDRAM modules. The exact
schedule for completion of the facility will be dependent upon semiconductor
industry market conditions. |
| Seagate Technology |
disk drives |
In the 4
quarters leading up to publication of this article Seagate reported revenue of
$6.44 billion.
Although Seagate ships products into all the main
markets which use disk drives, its main strength is in the enterprise storage
market where it has approximately 48% market share based on unit shipments. |
| Toshiba |
DVD drives,
hard disk drives and flash memory |
Toshiba
Storage Device Division's is a subsidiary of the $52 billion Toshiba Corp. In
2004 Toshiba introduced the world's highest capacity 1.8" and 2.5"
hard drives.
In April, 2004 Toshiba announced it was investing US$2.5
billion in a new wafer fab to make NAND flash memory. The 300-mm facility is
expected to come on line in the second half of FY2005 (October 2005-March
2006), with an initial capacity of 10,000 wafers a month. At the full capacity
currently planned this will climb to 37,500 wafers a month.
A new
entrant to this list, Toshiba doesn't disclose its storage revenue. But I
believe that, barring unforseen technology problems, the company's technology
leadership in the small disk market will generate revenues which comfortably
place it in this list by 2006. |
| Western Digital |
hard disk
drives |
In the 4
quarters leading up to publication of this article Western Digital reported
revenue of approximately $3 billion.
That makes its the smallest
company in this list. But the company has managed to achieve growth while
remaining profitable during the tail end of the IT recession. That bodes well
for its prospects in the growth times ahead. | |
Companies
which dropped out of last year's top 10 list?
Fujitsu, Intel and
Sony dropped out of the list this year, see why below.
Intel - now that the PC
market has recovered, Intel, as usual after every earlier IT recession, will
refocus most of its resources back on its core and most profitable business -
making processors.
Other activities which helped the company's
revenue during the recession (such as flash memory) or which held out the
promise of future revenue streams (such as RAID controllers) will be downplayed,
spun off or terminated.
We've already seen that in Intel's results for
the first calendar quarter of 2004 its Flash revenue of $417 million was
lower than in previous years even though the flash market was experiencing
double digit growth rates during this period. In fact
AMD which reported $628
million memory sales in the same quarter is already a bigger memory company than
Intel
Intel benefits from the storage market by providing most of the
processors which go into NAS, RAID and SAN storage arrays, but the number of
units makes that business insignificant to the company comppared with PC and
server sales. Its agreement with
Emulex (announced in
2003) on storage focused I/O processors is unlikely to generate volumes which
will change Intel's view that PCs are its bread and butter products. In
retrospect it was probably a mistake on my part in earlier years to think that
Intel would want to, or need to reengineer itself for storage market. When
the PC and server markets are doing well, then Intel doesn't have to worry about
less profitable product lines.
Sony - despite the
company's optimism about the tape backup market, this market, in which Sony is
one of the most significant suppliers of media, and one of the leading
manufacturers of tape drives and library systems, has been declining in recent
years as users have started experimenting with the faster and cheaper
alternative of disk to disk
backup. Even if the tape library market does show some modest revenue
growth in the next few years as predicted by
Freeman Reports the
growth rate will be substantially less than the backup segment as a whole.
Sony's other main footprint in storage is in the faster growing
flash memory market. But
there's strong competition and it's unlikely that Sony will be able to dominate
it. Sony doesn't disclose its storage revenues, which I believe is in the
ballpark $2 to $3 billion. That's substantial, but not quite enough to make it
into this list.
Fujitsu
- although Fujitsu shipped around 10 million hard disk drives in 2003 that's
still lower volume than the other HDD rivals listed here. In March 2004
Fujitsu sold its storage software business
Softek to a
management buyout team, also reducing its storage revenue. Fujitsu's company
report in April 2004 cited high development costs and losses in all its
software activities which may have contributed to the manufacturer's decision to
reduce its exposure. But another factor may be that the software company was
hampered from making alliances with other computer oems because of its server/PC
parent.
What about Solid State Disks?
It
was too early for solid state
disk companies to make an appearance in this year's list, even those with
annual growth rates above 100% are too small... for now. But I expect to see
some SSD companies making a debut at the low end of the list in next year's
edition of this article which will predict the top storage companies in 2007. | |
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