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2Q15 Could Be One of Worst Financial Quarter for Public Storage Companies

Not for several start-ups

The calendar 2Q15 financial results of traded storage companies will begin to be revealed tomorrow by IBM, in two days with the figures from EMC in front of  SanDisk, then the rest of the pack.

But we think that the numbers for all these big firms are not going to be excellent, and even that this three-month period could be one of the worst one for many of them. Why?

There are some reasons depending on the conjuncture, notably the unstable macroeconomic conditions, the exchange rate between euro and dollar not favorable for companies based in USA, the weakest demand in EMEA, the decline of PC shipments.

But there are others more important reasons. The worldwide storage market revenue is stabilizing after years of growth. The arrival of SSDs, more expansive than HDDs, is helping but end users are limiting their flash capacity to a strict minimum and only for critical applications because of the higher – but decreasing – price of the devices. The market of HDDs, a big part of the storage industry, was declining sharply in 2CQ15 and wait for poor results for Seagate, WD and Toshiba in this field. The demand for storage capacity continues to increase but the prices of hardare and software continue to decline on a global basis.

On the other side, 2CQ15 will not be a bad period for all storage companies, especially for several very successful start-ups attacking storage giants with innovative hard and software. They include Exagrid, Kaminario, MapR, Nakivo, Nasuni, Nimble Storage, Pure Storage, Quorum, SimpliVity, SolidFire, Tegile, Tintri, Unitrends and Veeam, all of them growing at 10% and much more.

Some analysts estimate that the arrival of the new Windows 10 operating system, coming after Windows 8.1, will push the PC and notebook market, and consequently the HDD market.

Already some public firms have published preliminary financial results for 2CQ15,
and, for all of them, revenue expected is below their guidance:

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