In a meeting with analysts, NetApp CEO Tom Georgens said that server providers like Hewlett-Packard and IBM are “losing ground” in the storage market to companies that primarily focus on that sector. He added that almost no one buys storage from these server companies and those who buys storage are only those who purchased servers from them.

The trends nowadays supports Tom Georgens claim. Most enterprises are shifting to purchasing storage rather than servers. In most storage conferences, users are comparing the ratio of VMs to physical servers. Some indicated 10:1, 20:1, 30:1 or even wider gaps. Users also share how much of their company is virtualized and it has been in an upward trend.

Currently, NetApp and EMC are leading in the storage market. Can server companies like Dell, HP and IBM compete in the storage sector? The competition is getting tight. Over the past few years HP did a few acquisitions to meet the growing demand for space. Last year, HP drops $2.1 billion for acquiring 3PAR. They also partnered with Quantum and rolls out Scalar i6000 and the P2000 G3 Modular Smart Array. Meanwhile, Dell beefs up its portfolio by making key acquisitions – Compellent, Exanet and Ocarina Networks.  They have been competitive so far with a $945 million profit and forecasted $4 – $5 billion revenue in storage by fiscal 2015.

While EMC still leading the race, NetApp has been steadily rising over the last two years with 45% growth compared to EMC’s 17%. NetApp differentiates itself as it offers convergence solution to users. To have a firmer grip on the market, NetApp has purchased LSI Corp for $480 million. “Integration is going to be [the server companies’] value proposition,” Georgens said. “However, customers know what they’re gaining in integration, they’re giving up in best of breed. Server companies are not the best of breed at anything.”

Below is a video from theCube with NetApp’s Patrick Rogers, where he discusses the company’s strategy in this growing sector.