10 March 2003 The storage systems market is set to return to growth in 2003 following a surprise upturn in sales in the fourth quarter at the end of an otherwise turbulent year, according to new figures from analysts IDC.

However, price competition remains fierce and vendors will not see a return to the profit margins they enjoyed during the 1990s.

In 2002, Hewlett-Packard leapfrogged EMC and IBM to take leadership of the storage market as a result of its acquisition of Compaq, the former market leader, which had been particularly strong at the low-end.

However, the 2002 market share of HP and Compaq combined fell 14%, with the main beneficiaries being Dell at the low-end, which saw sales rise 13% to break the $1 billion barrier, and IBM, where sales rose 15% to $3.99 billion.

Furthermore, in the fourth quarter IBM also challenged HP for the top spot after its quarter-on-quarter sales increased by 34% to $1.34 billion, compared to HP’s more modest quarter-on-quarter rise of 6% to $1.37 billion.