"The disk storage system vendors are really seeing the impact of the global economic downturn in the first quarter revenues," Steve Scully, IDC’s enterprise storage research manager said at the time.

Storage could actually be seen as a bright spot compared to the server market, in which first quarter revenues were 24.5% lower than the previous year.

“When you compare storage to the rest of the ICT [information and communication technology] area, I think you’ll find that storage weathered the whole downturn better than many other sectors,” Woo says. There is still pent-up demand for storage technologies among IT shops, says Woo, who predicted that revenue will bounce back later in 2009. Further down the road, Woo expects the to fuel new purchases in 2010 and 2011.

EMC remains confident because IT spending seems to be stabilizing, and its could help the company win more customers in the de-duplication and backup markets. While EMC suffered large year-over-year declines, its second quarter numbers were slightly better than its first quarter revenue and income. EMC rival NetApp’s next earnings announcement is scheduled for Aug. 19.

Enterprise Strategy Group analyst Steve Duplessie expressed concern over Seagate’s numbers but said EMC’s earnings were “pretty strong” considering the circumstances.