Article

EMC gains software market share

Jo Maitland, Senior Executive Editor

According to IDC's Worldwide Quarterly Storage Software Tracker, the combined results of EMC Corp. and Legato led the overall market this quarter with 31.8% revenue share, gaining the most market share among the top five vendors over the third quarter of 2003.

While EMC gained a percentage point from a year ago, Veritas Software Corp. lost 1.3%, according to IDC. In revenue terms, EMC reported $608 million in the third quarter of 2004, compared with $495 million in the same period a year ago. Veritas reported $415 million for the fourth quarter this year and $368 million in the third quarter of 2003.

"There is a trend toward customers reducing the number of vendors they have to deal with, and EMC's numbers support this," said Bill North, director of storage software research at IDC. "As the software market matures, the gap is narrowing from a software functionality point of view, making the best-of-breed argument less compelling," he said.

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Veritas also suffered at the hands of its partners. Its storage resource management (SRM) and file-system revenue was slightly off, according to IDC, reflecting the lackluster performance by two of its key OEM partners, Hewlett-Packard Co. (HP) and Sun Microsystems Inc. "Their volume manager software is tied to other people's system hardware sales, and when they do badly, so does Veritas," North said.

Computer Associates edged out HP and IBM for the third position with 8.8% revenue share. HP and IBM finished in a statistical tie for the fourth position with 7.6% and 7.1% revenue share, respectively.

During the fourth quarter, customer investment in storage software grew to nearly $36 for every $100 spent on storage systems, driven by the complexity of managing increased capacity," North said.

Continuing the momentum from last quarter, all of the major storage software functional markets posted double-digit revenue growth in the third quarter of 2004 when compared to the same quarter in 2003. The SRM market posted the largest gain at 27.3% year-over-year growth, while the backup and archive software market continued to represent the largest functional market, growing 17.4% year over year. The storage replication software and file-system software markets posted strong results in the third quarter with 13.7% and 10.3% year-over-year growth, respectively.

Overall, the worldwide storage software market surpassed $1.9 billion in quarterly revenue for the first time in the third quarter of 2004, growing at 19.1% year over year.


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