Hewlett-Packard Unexpectedly Expands in Network Storage

IDC says H-P's share rose to 25.6% in the third quarter but EMC remains top dog in network storage.
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Despite the loss of several prominent executives,

Hewlett-Packard

(HPQ) - Get Report

continues to gain strength in the network-storage market, according to data released Friday by the International Data Corp.

In the third quarter of 2003, H-P's share of the network-storage market grew 1.2 percentage points from year-ago levels to 25.6% of the $1.7 billion total factory sales during the quarter for all vendors. (Factory sales do not include sales by one company to an OEM for resale.)

"There's all this buzz that H-P is dead in the water. It obviously isn't," said John McArthur, who heads IDC's storage research group.

In recent months, key storage executives including Howard Elias, Mark Lewis and Mark Sorenson all have left the company. Elias, who had had been H-P's senior vice president of business management and operations for the enterprise systems group, jumped ship to join storage rival

EMC

(EMC)

.

EMC continues to lead in the network-storage market with a share of 28.9%, followed by H-P and

IBM

(IBM) - Get Report

, with a share of 11.5% in the quarter. Although network-storage revenue comprises only about 36% of the total storage market, it is seen as an area likely to grow strongly in the future.

H-P continues to lead in the overall disk storage market with $1.2 billion in revenue, for a share of 26.4% during the quarter. Factory revenue totaled $4.78 billion in the quarter, a slight year-over-year drop, due largely to shrinking average selling prices.

H-P actually lost a bit of share in the quarter while its overall storage revenue declined 2.4% to $1.2 billion. IBM remained No. 2 in terms of revenue in the market, gaining 1.2 share points as its revenue increased 5.2% to just over $1 billion. Third-ranked EMC gained the most; its share increased to 12.9% from 10.7%, and total storage revenue increased by 20.5% to $617 million.

The quarterly IDC survey does not include single hard drives for desktop and network computers. It defines disk storage systems as a set of storage elements, including controllers, cables and other components associated with three or more disk drives.