Data storage is a sweet market to work in right now, according to a fresh report from market research firm IDC. And it's the pure-play storage specialists that are driving the march, at the expense of the guys who build entire systems.
First-quarter sales of storage equipment grew an impressive 18.8% year over year. EMC
Shift the focus to just external storage systems, and the picture changes a lot. EMC grew external storage sales by 38% over the same period in 2009, partly thanks to the acquisition of Data Domain but also due to plain, old organic growth. NetApp, which lost out in that Data Domain auction, still outperformed EMC with a 47% sales increase. HP, IBM, and Dell all failed to keep up with these staggering growth rates.
External storage has become the "in" solution in data centers everywhere, because the twin revolutions of cloud computing and virtualization demand a centrally managed cache of high-volume storage. This is why EMC loves virtual computing expert VMware
NetApp is the most impressive performer here, delivering outsized gains even without high-budget acquisitions. While the demand for larger and better-managed disks continues to grow, NetApp and EMC will continue to deliver the goods. And if Cisco Systems
Are NetApp and EMC too expensive with P/E ratios over 30, or do their business opportunities make them worth every penny? Discuss in the comments below.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. VMware is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.