Since its acquisition of Isilon in late 2010, EMC (NYSE:EMC) has made making significant progress in scale-out network attached storage (NAS) market, a fast-growing segment under the total open networked disk storage market. While Isilon has long been leader in the scale-out NAS market,  EMC’s ownership has provided a major boost to Isilon sales which are expected to double in the fourth quarter of 2011 from the $60+ million seen during the time of its acquisition.  The Isilon acquisition has provided EMC a clear advantage over arch rival NetApp (NASDAQ:NTAP), which launched its ONTAP 8.1 scale-out NAS clustering product last year in response to EMC’s growing presence in scale-out NAS market.
We have a $42.15 Trefis price estimate for EMC, which is nearly double the market price.
Open Networked Disk Storage Systems Growing Faster than the Overall Market
The total open networked disk storage market, comprising both NAS and storage area network (SAN) architectures, grew 12.3% year-over-year in third quarter of 2011 to around $4.9 billion in revenues. This was faster than the growth seen in the total external disk storage systems market that grew to $5.8 billion in revenues, representing a 10.8% growth from the prior year’s third quarter. 
EMC is currently the leader in total external disk storage systems market with 26% revenue share well ahead of competitors IBM (NYSE:IBM), NetApp and HP (NYSE:HPQ). In the NAS market, in particular, EMC has a dominant 46.7% revenue share followed by NetApp at 30.9%.
EMC’s Market Share will Increase
With EMC looking to strengthen its position in the fast-growing NAS market with Isilon, we expect EMC’s market share of NAS as well as the total external disk storage market will increase going forward, as shown in the chart above.
Note that the chart above is an estimate of EMC’s market share of total external disk storage systems by GB and not revenue.Notes: