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IBM pulled ahead of Hewlett-Packard in storage hardware sales in 2006, though it still trails industry leader EMC, according to new figures.

In revenue, IBM's share of the global external-controller disk storage market grew to 15.8 percent in 2006, from 14.5 percent in 2005, while HP's share dropped to 13.1 percent from 14.7 percent according to a Gartner report. That elevates IBM to second place behind EMC, which stretched its lead, growing its share to 24.8 percent last year from 23.4 percent in 2005, according to Gartner.

"I think the records will reflect that it's been about 10 years since we passed HP," said Andy Monshaw, general manager of IBM storage. As recently as five years ago, HP had a 15-point storage market share lead over IBM.

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Monshaw attributed IBM's performance to a refreshed product line, a focus on selling systems rather than individual products and increased sales in the small-to-midsize business market.

HP Chairman, CEO and president Mark Hurd acknowledged the weakness in his company's storage business during a presentation at a Morgan Stanley technology conference.

HP's storage revenue grew only 3 percent in its fiscal first quarter, which ended in January. Hurd attributed that performance to the fact that much of the company's product line is tape storage, which is a declining business. However, sales of its EVA line of disk storage products grew 18 percent in the quarter.

Hurd also said during the company's quarterly earnings announcement on 20 February that HP needs to expand its storage sales force. "We just don't cover enough accounts," Hurd said.

Gartner reported that Hitachi Data Systems was the fourth placed storage vendor, with 9.6 percent of the market, followed by Dell with 7.6 percent, Network Appliance with 7.2 percent and Sun Microsystems with 6.1 percent.

Gartner noted that the storage market is increasingly dominated by the top players and is driven by industry consolidation, more effective marketing and strong channel partnerships. The top seven storage vendors accounted for 84.2 percent of the market in 2006, up from 81.5 percent in 2006.