1. www.idc.com Western European Disk Storage Systems Market Overview Eric Sheppard Program Manager, European Storage System

2. Agenda Market update  Market value ($ & €)  Capacity demand (TBs)  Historic networked storage trends –FC, iSCSI, FICON, DAS, NAS  Supplier shares and trends  Capacity & revenue forecasts (2005-2010) –External vs. internal –FC, iSCSI, FICON, DAS, NAS  Essential guidance Note: This is a branded view of the market

3. Western European Market Update Demand for external disk systems remains strong  56% Y/Y TB growth 7.9% Y/Y revenue growth  Internal storage sales remain weak

4. Western European Disk Systems Market: 2Q2006 Total Disk Systems Market: –Y/Y TBs 40.7% (175.8PBs) –Y/Y Dollars 1.8% ($1.77B) –Y/Y Euros 1.1% (€1.41B) Total External Disk Systems Market: –Y/Y TBs 56.2% (122.5PBs) –Y/Y Dollars 7.9% ($1.22B) –Y/Y Euros 7.1% (€972M) Total External RAID Disk Systems Market: –Y/Y TBs 60.3% (110.6PBs) –Y/Y Dollars 8.9% ($1.14B) –Y/Y Euros 8.1% (€905.6M) Key Trends

5. Western European Disk Systems Market: 2Q2006 Networked storage comments –Y/Y NAS 23.7% to $164.5M –Y/Y SAN 12.9% to $718.3M –Y/Y External DAS -6.7% to $337.1M –2Q2006 iSCSI up 127% (Y/Y) to $19.5M External Arrays by Priceband: –$150K+: $463.0M-1.3% Y/Y –$50K-$150K: $297.2M -1.6% Y/Y –<$50K: $459.8M 27.9% Y/Y Key Trends (continued)

6. Quarterly W.E. Disk Systems Market Market Revenue ($B) Market Revenue (€B)

7. Quarterly W.E. Disk Systems Market Market Revenue ($B) Y/Y growth rates:  5.5% in CY2005  3.0% in 1Q2006  1.8% in 2Q2006 Y/Y external only  7.8% in CY2005  7.9% in 1Q2006  7.9% in 2Q2006 Y/Y internal only  1.4% in CY2005  -6.5% in 1Q2006  -9.6% in 2Q2006

8. Quarterly W.E. Disk Systems Market Y/Y growth rates:  51% in CY2005  45% in 1Q2006  41% in 2Q2006 Y/Y external only  63% in CY2005  55% in 1Q2006  56% in 2Q2006 Y/Y internal only  34% in CY2005  25% in 1Q2006  15% in 2Q2006 capacity Shipments

9. Western European Market Update Demand for external disk systems remains strong  56% Y/Y TB growth 7.9% Y/Y revenue growth  Internal storage sales remain weak Networked (SAN & NAS) storage remains growth engine  72% of 1H2006 external array market revenue from networked storage  Support for Fibre Channel host connection is critical

10. W.E. External Disk Storage Systems Market Revenue (€M) 12.6% Growth 23.6% Growth 6.5% Decline

11. W.E. External Disk Systems Market Revenue by Installation Environment iSCSI $33M Market Revenue ($B) iSCSI $17M

12. Western European Market Update Demand for external disk systems remains strong  56% Y/Y TB growth 7.9% Y/Y revenue growth  Internal storage sales remain weak Networked (SAN & NAS) storage remains growth engine  72% of 1H2006 external array market revenue from networked storage  Support for Fibre Channel host connection is critical Hewlett-Packard is defending its installed base better  Inventory troubles at EMC helped HP increase its share gap  NetApp, Sun, Dell & HDS have comparable external revenue

13. Western European Disk Systems Market: 2Q2006 HP was the largest external array supplier –Total external sales grew 24.9% Y/Y, 11.6% Q/Q –EVA sales $108M (+47% Y/Y, -3.4% Q/Q) –MSA sales $96.4M (+5.3% Y/Y, 14.7% Q/Q) –XP sales $79.4M (+43% Y/Y, 53% Q/Q) EMC second largest external array supplier –Total external sales grew 4.5% Y/Y, -21% Q/Q –Symm/DMX sales were $81.4M (+6% Y/Y, -23% Q/Q) –Branded CX sales* were $54.1M (-21% Y/Y, -32% QQ) IBM Third largest external array supplier –Total external array sales grew 7.3% Y/Y, 24% Q/Q –DS8000 & ESS sales were $84.3M (-14.4% Y/Y, 60% Q/Q) –DS4000 sales were $58.6M (74% Y/Y, 49% Q/Q) –DS6000 sales were $6.6M (-32% Y/Y, 60% Q/Q) Key Supplier Trends *Excludes sales through Dell

14. Western European Disk Systems Market: 2Q2006 NetApp: >8% external WE market share for the first time –$94.5M in total revenue (45% Y/Y, 9% Q/Q) –FAS3000 $50.5M represented 53% of 2Q revenue –FAS6000 minimal for 2Q –FAS200 sales were $21M (13% Y/Y, 12% Q/Q) Sun increased external market ranking to #5 –STK added $15M to Sun’s 2Q06 sales –Including STK, external sales grew 1.5% Y/Y, 53% Q/Q –Excluding STK, external sales fell 17.8% Y/Y, grew 53% Q/Q –Sun’s SE6000 & SE3000 declined 28% & 22% Y/Y respectively –SE9900 declined 8% Y/Y ($23.1M) Dell’s external array ranking fell one spot to #6 –External revenue declined 16% Y/Y, 13% Q/Q –Dell|EMC revenue was $48M (-18% Y/Y, -13% Q/Q) –NAS revenue fell 60% Y/Y to $2.3M

15. WE External Array Factory Revenue by Priceband & Select Supplier HP EMC IBM NTAP Dell Sun HDS Others

16. W.E. External Disk Systems Supplier Revenue-Limited Suppliers ($M) 3 Month Quarters No FSC quarterly data prior to 2005

17. W.E. External Disk Systems Supplier Revenue-Limited Suppliers ($M) 12 Month Quarters

18. Western European Market Update Demand for external disk systems remains strong  56% Y/Y TB growth 7.9% Y/Y revenue growth  Internal storage sales remain weak Networked (SAN & NAS) storage remains growth engine  72% of 1H2006 external array market revenue from networked storage  Support for Fibre Channel host connection is critical Hewlett-Packard is defending its installed base better  Inventory troubles at EMC helped HP increase its share gap  NetApp, Sun, Dell & HDS have comparable external revenue Storage demand to remain strong through 2010  52% capacity shipment CAGR (2006-2010)  Price pressure to keep revenue growth moderate  Blade servers to accelerate market shift towards external, networked arrays

19. WE Disk Storage Systems Forecast Total capacity Shipments:  40% internal CAGR  55% external CAGR Total Market Revenue ($M):  -4.1% internal CAGR  3.2% external CAGR Price Pressure from:  capacity optimized HDDs  Market maturation  Increase competition Blade servers to accelerate market shift towards external arrays

20. WE Disk Systems Market Revenue Growth

21. WE External Disk Systems Market Revenue Growth Networked storage 6.6% CAGR 2005-2010. Fibre Channel remains the largest segment. SAN growth acceleration partly from:  Market shift to blades  Increased adoption from <$50K arrays iSCSI CAGR of 68%  1.5% of 2005 networked storage  15.8% of 2010 networked storage

22. WE Disk Systems Market Revenue by Installation Environment

23. Top Storage Priorities In Europe Source: IDC, 4Q2005 Which THREE of the following are your company's top priorities relating to storage for the next 12 months? N: 508

24. The Business Content Expanding Storage  Copies to provide protection and rapid restoration – example remote DR data centers  Shift for older, more expensive, less efficient technologies (paper, microfiche, Etc.) – example Electronic Medical Records  Applications generating more complex data – examples - CRM, ERP, Etc.  Copies used in data marts to generate value from historic data – analytics, Etc.  Use of capacity hogging images and video – training, web support, Etc.  Increased competitive intensity – global competition, speed of new product introductions, lower margins  General unwillingness to get rid of anything …and the impact?

25. WW ATA Adoption Reduces Storage Cost SCSI/FC disk drives have been the mainstay throughout much of history But there is an increasing presence of ATA storage in the datacenter. Why?  Surveys of data center managers continue to confirm that the majority of storage TBs do not need to reside on high-performance storage Petabytes WW HDD TB Shipments into Enterprise Storage Solutions by Type

26. WW Capacity vs Performance-Oriented Drives The availability of large capacity, low-cost “good enough” storage will continue to attract the attention of IT managers.

27. WE External Disk Systems Raw Capacity Cost

28. WE Disk Storage Systems Forecast Ext. TB shipments to increase at a 55% CAGR Who plans to increase their data centers 500%? Who plans to increase their IT staff by 500%? Managing this explosion in capacity remains a key challenge Suppliers must focus on enabling improved efficiencies, but without comparable price increases Look to services & software

29. Worldwide Storage Market Revenue by Technology & Compound Annual Growth $0 $10 $20 $30 $40 -5%0%5%10%15% 2005-2009 CAGR (%) 2005 Revenue ($M) Storage Services Disk Systems (Arrays) Storage Software Optical Automation SAN Infrastructure Tape Automation

30. Essential Guidance The storage industry must:  Provide greater flexibility in purchasing and expanding storage capacity –Storage as a utility???  Provide a way to maximize useful storage capacity and leverage existing storage resources  Enable reduction of ongoing administration costs in terms of staff, timeliness, and quality –Raw capacity costs may be decreasing, but mgt. costs are not. Impact on storage solutions:  Increased storage solutions that support tiers of storage optimized to meet specific requirements for performance, cost, capacity, and availability  Common data replication and migration capabilities that allow IT managers to easily and intelligently move data between different classes of storage  Storage management solutions that centralize and automate provisioning, expansion, and data protection tasks across heterogeneous systems

31. Please contact: Eric Sheppard esheppard@idc.com +44 (0)208 987 7220 Questions?