Updated from March 4 In another sign that the tech recovery is continuing, two major research firms reported that the market for external storage systems, a mainstay of business computing, was growing strongly by the end of 2003. Significantly, IDC found that the market grew by 8.4% year over year to $3.7 billion in the fourth quarter of 2003, the largest quarterly gain since the first quarter of 2001. A slow start to the year kept the growth rate for 2003 to 2% as the market reached $13.2 billion. Rival researcher Gartner/Dataquest, which collects data somewhat differently, reported Thursday that Dell ( DELL) took advantage of stronger corporate spending on external storage systems in 2003 to expand its revenue in that market by 44% to $634 million. After several years of declining total sales, the overall external storage market increased by 6% last year to $12.89 billion, according to the Gartner report. However, IDC warned that currency effects were responsible for much of the storage growth outside of the U.S. "The U.S. was the first to feel the downturn and is now leading in the recovery with a healthy 7% growth rate," said John McArthur, group vice president of storage research at IDC. "Outside the U.S., much of the perceived growth is the result of a weakened dollar. However, we are at least seeing signs of stabilization, which is an improvement over past quarters." EMC ( EMC), which sells storage systems to Dell for resale to corporate customers, retained its lead in the external storage market, growing revenue by 7% to $2.65 billion and boosting its share by 40 basis points to 20.6%, according to Gartner. Because of the differences in methodology, Gartner ranked EMC number one, followed by Hewlett-Packard ( HPQ). IDC reversed the rankings.