Yahoo Finance EMC Continues to See Decline in the Enterprise Storage Market
Highlights of EMC Corporation's 1Q16 Results
EMC leads the worldwide enterprise storage market
According to IDC, EMC Corp. (EMC) continued to lead the worldwide enterprise storage systems market at the end of 4Q15 with a share of 21.5%. EMC was followed by Hewlett-Packard Enterprise (HPE), Dell, IBM (IBM), and NetApp (NTAP) at 15.1%, 8.9%, 8.6%, and 6.3%, respectively. EMC accounts for 3.9% of the First Trust ISE Cloud Computing Index ETF (SKYY).
Revenues for EMC also fell YoY (year-over-year) in 4Q15 to ~$2.2 billion from ~$2.4 billion in 4Q14. EMC’s market share in the worldwide external enterprise storage systems market fell from 32.7% in 4Q14 to 31.7% in 4Q15.
Clients are now shifting toward low-cost, original design storage boxes, which has impacted revenues of large storage system vendors.
Last year, the major highlight for EMC was its merger announcement with Dell for $67 billion. The combined entity is projected to have a market share of 35% in the storage systems space.
However, analysts believe that large manufacturers such as EMC will have to provide storage solutions at cheaper rates to avoid losing market share to smaller vendors, as well as to sustain product sales in a relatively slower market environment.
Worldwide enterprise storage systems revenues fell by 2.2% in 4Q15
According to IDC, the worldwide enterprise storage systems factory revenue fell by 2.2% YoY to $10.4 billion in 4Q15. Total capacity shipments rose by 10.7% to 35.5 exabytes. Revenue growth fell within the group of ODMs (original design manufacturers) that sell directly to hyperscale data centers. This segment saw revenues fall by 14.4% YoY to $1.2 billion. External storage systems remained the largest segment, but revenues fell by 2.3% YoY in 4Q15.
“The enterprise storage market closed out 2015 on a slight downturn, as spending on traditional external arrays continues to decline,” said Liz Conner, research manager of storage systems. “Over the past year, end user focus has shifted towards server-based storage, software-defined storage, and cloud-based storage. As a result, traditional enterprise storage vendors are forced to revamp and update their product portfolios to meet these shifting demands.”
Browse this series on Market Realist: