1Q16 Revenue for Internal and External Storage Systems Declined 3% Y/Y – Dell’Oro Group

A report from Dell’Oro Group, a source for market information about the telecommunications, networks, and data center IT industries, revealed that price cuts are weighing on the storage systems market.

Dell, EMC, Hitachi, Hewlett Packard Enterprise, and NetApp are stemming share erosion.

“Established vendors are working hard to maintain share as smaller vendors, with a presence in flash storage and software-defined storage, and component suppliers sell directly to cloud service providers,” said Chris DePuy, VP, Dell’Oro Group. “In the past, larger vendors had acquired large start-ups or medium-sized companies to maintain share and profitability. More recently though, larger vendors have met their challengers in the channel by being more price aggressive. This is a change in competitive behavior.”

In 1Q16, revenues for both internal storage systems and external storage systems declined 3% year-over-year, midrange external grew 1%, and high-end external declined 14%.

The top five vendors by revenue in internal plus external storage were EMC, Hewlett Packard Enterprise, Dell, NetApp, and Hitachi.  

$40 billion storage systems industry experiencing many disruptive changes:

• Unified data center infrastructure is helping to accelerate the transition to IP-based storage
• Enterprises are changing their business models and shifting to public and private cloud data centers
• The cloud is demanding new and different storage requirements to those of the classic enterprise
• Equipment vendors are facing challenges to their traditional product lines and feature sets
• The growth trend in flash storage is bringing disruption to traditional storage systems