Editor: WW Storage Industry Going Down

About all the market reports prove that the WW storage is stabilizing and even going down:

• WW external enterprise storage systems market was down 5.4% Y/Y in 2Q17 from 2Q16 for IDC
• EMEA external storage systems value fell by 2.9% from 2Q16 to 2Q17 for IDC
• General-purpose disk array market is declining on a revenue and unit basis, even as capacity shipped continues to grow for Gartner
• EMEA purpose-built backup appliance market down 12% Y/Y in 1Q17 for IDC
• All SSD segments decline but enterprise PCIe in 3Q17 for Trendfocus
• HDD Shipments at 103 to 105 million in 3CQ17, Up 7% to 9% Q/Q but short term revival for Trendfocus
• WW HDD market declining to 395 million units shipped in 2017 for Statista

Does the appetite in storage capacity is stabilizing? We don’t think so. What happens is that end users are transforming the way they store data by transferring a lot of them to public cloud. But if less data are store in-house, they are transfer outside where HDD and SSD capacity into enormous systems is drastically increasing.

Total revenue of storage industry decreasing for several factors:

• It’s the end of traditional and expansive big storage subsystems, especially from EMC and now Dell EMC, NetApp or Hitachi with OEM – with the exception of Infinidat – replaced by commodity hardware, essentially servers, much more affordable, managed by software-defined offerings.
• It’s the same for mid-range configurations.
• Hybrid arrays and more than that all-flash arrays are exploding but the competition on price is intensive, especially for the vendors to get new customers as they always hope to keep them and to enhance their configurations. Revenue this exploding market does not compensate the decreasing sales of traditional disk arrays.
• Tape is declining and high-end expansive libraries are no more appreciated and replaced by cold storage on high capacity HDDs.

Four big trends pushing industry are now:

• SSDs will rebound when the price will begin to decline when there will be enough NAND chip production able to follow the high demand
• all-flash arrays but, as we said, being sold at relatively cheap prices, and by too many small and big vendors – we counted 118 companies in this business
• software-defined storage but on commodity hardware: software-defined storage solutions will generate WW revenue of $16.2 billion in 2021 for IDC
• converged systems: WW converged systems revenue increased 6.2% Y/Y in 2Q17 for IDC
• hyperconverged infrastructure: hyperconverged infrastructure fastest growing with 5-year CAGR of 26.6% for IDC
• object storage will definitively help to increase capacities
• as well as higher definition video, and
• IoT

Conclusion: the growth rate of the WW storage industry will be moderate and even slightly declining but the demand is strong for organizations to update their storage infrastructure for tier-1 (direct access), -2 (data protection) or -3 (cold storage) with a lot new hardware and software technologies being regularly revealed in all these three fields, especially by start-ups.