Factory revenues for external disk storage systems grew 3.5 percent year-over-year to $3.4 billion in the third quarter of 2004, according to data released by IDC this week.

This is the sixth consecutive quarter of year-over-year revenue growth, IDC said. The total disk storage systems market grew year-over-year as well, climbing 2.1 percent. Storage capacity also increased, by 50.5 percent year-over-year to 310 petabytes--the largest growth rate over the past seven quarters.

EMC claimed the No. 1 spot with 21.2 percent of revenue share in the external disk storage systems market, posting a 17.4 percent year-over-year gain in revenue during the quarter.

Second place Hewlett Packard, which had 19 percent of the market, saw revenue dip 7.5 percent year-over-year. IBM came in third with 13.1 percent market share. Network Appliance posted the strongest year-over-year revenue growth during the third quarter, with 24.6 percent growth, IDC said.

EMC was also on top in the total networked storage market with 28.9 percent revenue share, followed by HP, with 23.3 percent, and IBM, with 11.5 percent. For the top ranking in the Open/iSCSI SAN market, HP and EMC differed by only 0.2 percent, the market researcher said.

IDC attributed the growth in the external disk storage market to increased adoption of entry- and midrange networked storage, which it defines as storage priced below US$150,000 per system. The top vendors introduced external storage systems and solutions targeted to specific customer and application segments during the third quarter.

In the network attached storage, or NAS, market, which grew 14.3 percent over the third quarter of 2003, Network Appliance led with 36.3 percent revenue share, followed by EMC with 34.8 percent share. HP was in the top position in the total global disk storage systems market with 23.6 percent revenue share, while IBM was in the second place with 20.6 percent share.

"We are encouraged to see continued growth in disk storage systems, despite the lower rate when compared to previous quarters," Brad Nisbet, program manager at IDC, said in a statement. "Conversely, we saw an increase in the growth of petabytes shipped, which is yielding the largest dollar per gigabyte pricing decline in seven quarters and points to a growing share of higher-capacity, lower-cost disk drive deployments and a broader variety of products offered by the major vendors."