The last couple of quarters haven't been extremely kind to HP in the storage market. While companies like EMC and NetApp have increased their market share, yours has been falling. Why is that?
If you look at the historical trend, overall we have been losing market share in external storage. But that is changing. If you look at the areas where we have introduced key technologies based on our modern architectures, for instance our 3Par architecture, we are seeing some dramatic changes. Last quarter we grew our worldwide market share by 1.7 percent year over year in the mid range having introduced the 3Par 7000 series. It turned out to be one of the fastest growing product lines that HP has ever introduced in the enterprise business.
In fact, that product line has helped gain market share in countries like India, which is an example of what is to come. In the last couple of quarters in India, we have gone from having the 4th largest market share to the second largest market share in the external disk storage space
The reason why our overall market share figures have not looked so good is that we have some products that are in the decline. But overall, the transition is working well and we believe you will start to see our market share position strengthening commensurate with some of the quarter over quarter improvements that we have been seeing. In fact, if we look at calendar Q2 over Q1 as reported by IDC, we are up over 1.5 percentage points in market share. So, fundamentally we are starting to see the inflection point occur.
So, do you think this growth will come at somebody else's expense? Because NetApp seems to have grown quite a bit in the past at your expense.
Historically, independent storage providers like EMC and NetApp have grown and the system vendors have shrunk (in market share). You will start to see the first example of the reverse with our performance in the mid-range and high-end.
When you look at NetApp, it has grown tremendously over the last few years — increasing its market share from about 7-8 percent to about 12-13 percent.
I think in India it's (NetApp's market share) about 11.1 percent last quarter and we had about 19.1 percent market share at the same time.
I am talking about the global IDC figures. So, is it a worrying sign that independent storage companies like NetApp seem to be doing much better that companies like HP and for that matter even IBM?
I think its something that has concerned HP over most of the last decade. And around 2009-10, we decided to make major investments in storage and focus on building out our own IP by either acquiring or organically building it.
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