Global demand for disk storage was "relatively soft" during the third quarter of 2003, growing a modest 36 per cent year-over-year to 197 petabytes shipped in the third quarter.
The results, which IDC said were "well below historical levels", saw worldwide disk storage systems factory revenues reach $4.8bn in the third quarter, down 0.3 per cent compared with the same period in 2002.
"While the rate of capacity growth has declined in each of the last four quarters, price declines have also moderated and remained below 30 per cent year-over-year for the last two quarters," said John McArthur, group vice president of storage hardware research at IDC.
"Rather than waging price wars, suppliers are increasingly turning to higher-value software, services and application integration to gain competitive advantage."
According to IDC's latest Worldwide Disk Storage Systems Quarterly Tracker, HP continued to lead the total disk storage system market in the third quarter of this year, with 26.4 per cent revenue share, followed by IBM and EMC.
Among the top five suppliers, Dell and EMC were found to have posted the strongest year-on-year factory revenue growth, with 22.9 and 20.5 per cent gain respectively.
EMC's strong performance was, the study said, due in part to an easy comparison, with an unusually weak third quarter in 2002.
Regardless of which company designs and manufactures the disk storage system, IDC reported that server suppliers remain an important route to market.
The top four server vendors - HP, IBM, Dell and Sun - captured almost half of the external storage market.
This was up slightly on the third quarter of 2002, with the four making the most of their OEM relationships with storage companies such as Hitachi (HP and Sun), EMC (Dell), LSI Logic Storage Systems (IBM) and DotHill (Sun).
EMC again led in the total network storage market (Nas combined with Open San) with 28.9 per cent revenue share, followed by HP and IBM.
In the Open San market, which grew 15.7 per cent compared to the same quarter a year ago, HP led with 31.2 per cent revenue share followed by EMC with 27 per cent share.
In the Nas market, Network Appliance and EMC continued their extensive competition, remaining in a statistical tie with $136m and $130m in Nas revenue respectively.
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