Storage giant EMC ( EMC) has widened its lead over rival Veritas ( VRTS) in the growing market for software to manage data storage for large businesses.

Market researcher IDC on Monday reported that EMC sold $563 million worth of storage software in the last quarter of 2003, and led the pack with a market share of 31.7%. EMC's hefty share included sales made by Legato, acquired last year by EMC. No. 2 Veritas had software sales of $389 million in the quarter, for a market share of 21.9%.

A year ago, EMC had a share of 25.7% vs. 21.3% for Veritas. But the $1.2 billion Legato acquisition has tipped the balance even more heavily in EMC's favor.

"Legato's accelerated growth throughout 2003 concluded with record revenue in the fourth quarter," said Howard Elias, EMC's executive vice president.

The rival companies are battling over a market that grew by 17.7% (year over year) in the fourth quarter to $1.78 billion. Overall, the storage software market grew by 8% in 2003 to $6.29 billion, an increase of $500 million, IDC said.

John McArthur, who heads IDC's storage research, said that large businesses are consolidating much of their information processing in large data centers, "which are investing heavily to secure, manage and protect their digital assets."

For the full year, IDC reported that EMC's storage software sales were $1.9 billion, a share of 30.7%, while Veritas had sales of $1.3 billion, a share of 21.3%.

Ranking third in market share during the fourth quarter was Computer Associates ( CA) with sales of $174 million, followed by IBM ( IBM) at $148 million and Hewlett-Packard ( HPQ) with sales of $141 million.