High-end storage systems that run into millions of dollars are not high on IT purchasing agendas at present. This factor has not helped EMC, the market leader in this sector. Indeed, one third of respondents to a recent CIO survey by investment bank Merrill Lynch said their relationship with EMC was becoming less important.

As a result, the company’s third financial quarter offered only a slight improvement in revenue of 4% on the same quarter in 2001, an uplift driven largely by sales of less-costly systems such as EMC Clariion product, which are also resold by Dell.

At the high-end, EMC has been forced to drop prices to around 30% to 40% of year-ago rates, a move that dragged down overall storage hardware sales.

The company releases the next version of its high-end disk array product, Symmetrix early next year, and many customers are likely to hold back orders till this becomes available. Consequently, EMC’s fourth quarter is not likely to offer much respite from its current uninspiring performance.