Wondering why the network storage sector
hit a home run in the fourth quarter? Here's the reason: The worldwide market for external disk storage swelled by 17.9%, according to market researcher IDC. To be sure, the comparisons were rather easy; a year ago the market grew by just under 1%. Still, the numbers were impressive. Total factory revenue was $4.66 billion, up from $3.95 billion. "We're looking at a healthy, robust market," says IDC storage analyst Brad Nisbet. Not only are companies responding to the overall increase in data, but also they are paying more attention to the need for backups and disaster recovery in the wake of the hurricanes, Nisbet added. EMC ( EMC) continues to lead the sector, but second-ranked Hewlett-Packard ( HPQ) and third-place IBM ( IBM), both of which performed poorly a year ago, "have begun to turn their ships around," said Nisbet. EMC grew revenue by 11.6% to $962 million, for a total market share of 20.6%. Fourth-place Dell ( DELL), whose revenue includes resales of EMC storage gear as well as its own, grew factory revenue 54.2% to $428 million and now has a market share of 9.2%. IBM gained 3.1 points of share, the most of any player, as its revenue increased by 46.8% to $743 million. A year ago, both IBM and H-P had poor quarters; IBM's revenue dropped by 20.3%, H-P's by 7.5%. EMC's revenue grew by 13.4% in the same period, according to IDC. That being said, a look at the yearly statistics indicates the improvement both companies have made in storage, says Nisbet. IBM's external storage business grew by 23.8% in 2005; H-P's by 11.9%. EMC's business grew 10.2% in 2005. Speaking of IBM's comeback, Nisbet said that last year's performance was dragged down by a rather bumpy launch of a key, high-end product. "Now, IBM's product portfolio has expanded, and it is executing well on it," he said.