Middle East and Africa Disk Storage Market Posts Resilient Y/Y Growth

The disk storage market in the Middle East and Africa (MEA) posted strong year-on-year growth in the third quarter of 2012 despite a sluggish performance from all countries when compared to the previous quarter, according to the latest data from IDC Corp.‘s EMEA Quarterly Disk Storage Systems Tracker.

Disk revenue in the MEA region was up 20% year on year in Q3 2012 to total $264 million, while terabyte capacity was up 43% over the same period, and IDC expects to see further robust growth in capacity consumption through to the end of the year.

The information and communications technology industry is witnessing the emergence of a common ‘third’ platform that integrates mobility, cloud, analytics, and social networking, and IDC believes this is having a clear impact on the growth of the region’s storage market.

”These market developments reflect IDC’s predictions for industry transformation towards the ‘third platform’ of computing growth, with vendors showcasing their converged systems offerings and end users showing increasing curiosity and demand for modularized solutions," says Arun Philip, storage research analyst at IDC MEA, and Turkey. "Certain vendors have successfully commenced their efforts to capture the demand for integrated systems and, looking forward, this market opportunity will only flourish.”

IDC observed that this bullish trend was a testament to the resiliency of the disk storage market, with the region’s individual country markets all declining when compared to the second quarter of this year.

”The market emerged relatively unscathed in Q3 and it can only get better in Q4," says Philip. "The final quarter of this year will see an extremely positive performance, as it is typically the fly-away quarter for the region, with new project signings expected to bolster an already strong run-rate business.”

The North Africa region (including Morocco, Algeria, and Tunisia) recovered strongly in Q3 2012 from a dismal performance in the previous quarter, following the successful implementation of government tenders and new project initiatives in the telecommunications sector. In particular, IDC observed increasing vendor activity towards converged infrastructure solutions and integrated solutions awareness programs across this region. In South Africa, the disk storage market recorded double-digit growth figures year on year, spurred by large enterprise deals in the manufacturing, oil and gas, telecommunications, mining, banking and financial services sectors.

"Looking to the future, IDC predicts that growth in South Africa’s import-heavy disk storage market, and therefore the wider region, will be driven by high-end models due to the saturation of low-end models, while currency fluctuations versus the U.S. dollar will also have a significant influence on the market’s performance," says Philip.

In the Middle East, Oman led the way in terms of year-on-year storage growth.

”Primary storage market drivers have evolved as virtualization is now the norm and the industry is rampantly growing due to cloud technologies, mobility trends, datacenter optimization, and converged/integrated solutions,” says Philip.

IDC observed that Qatar, which frequently grabs headlines for leading storage growth in the region, enjoyed double-digit growth year on year due to the strong performance of the petrochemicals and banking sectors, but suffered a double-digit decline when compared to Q2 2012. The remaining GCC and Middle Eastern countries (excluding the UAE and Saudi Arabia) posted moderate year-on-year growth on the back of volume business, despite no new projects being signed. This is in line with IDC expectations for the disk storage market during the second half of the year, complemented by the launch of new technologies and product offerings in the region.

Saudi Arabia and the UAE continued to post double-digit growth year on year but these markets remained virtually unchanged when compared to the previous quarter. The growth in these two countries was primarily driven by demand from the government, telecommunications, aviation, and banking sectors, and the outlook remains positive.

"The future of storage is data growth," says Philip. "Both vendors and end users have realized this and are working in close collaboration with each other to implement novelty offerings that will empower the industry to effectively manage this prolific growth".

From a protocol perspective, IB, iSCSI, and NAS were the region’s standout performers, having displayed tremendous year-on-year growth. IDC observed rampant growth for the iSCSI protocol across EMC, IBM, and NetApp models.

"A need for storage centralization and effective management capabilities drove double-digit growth for NAS protocols, while RAID continued to dominate redundancy with nearly 99% share of all shipped models," says Philip.

In terms of the vendor rankings, EMC retained its top spot, with nearly 42% market share thanks to its strong showing in the telecommunications, banking, petrochemicals, and law-enforcement sectors right across the MEA region. IBM secured second place with more than 11% market share, boosted by the finalization of overdue deals and its ability to capture a niche market through its family of integrated systems offerings. NetApp placed third with just under 10% share, followed by HP and HDS with 9% and 8% shares, respectively.