Some Improvement in Europe for Enterprise Storage for VARs

A survey of 76 global VARs from UBS Financial Services Inc. (UBS) has brought some technology insight on the macro outlook for enterprise storage, with some improvement showing up in Europe, while things are moderating a bit in USA.

Overall, its takeaway is that momentum has stalled a bit in storage – but at a high level, with 95% of respondents saying sales over the prior three months was on or above plan.

But European data was “notably” better than USA for the second straight quarter – with one vendor, Dell EMC, bucking that trend with continued strength in the US market.

The survey shows stable but solid demand sequentially at Dell EMC, with 50% of respondents saying demand was strong or very strong for the second straight survey. In USA, just 12% of respondents say they’re below plan, vs. 27% a year ago.

Some 98% of US respondents were on or above plan (a 1,300-basis-point improvement from last quarter) while modest softness was in Europe and APAC, with 20-25% of respondents below plan.

Meanwhile, in the important AFA market, Dell EMC logged more solid results with some 63% of respondents citing strong conditions.

And while UBS has only tracked storage data for HPE for 3 quarters, that data keeps getting softer. Some 22% of global respondents said demand was strong or very strong (down 400 bps from last survey and down 800 bps from two surveys ago). That decline was driven by drops in both the US and Europe, with APAC improving.

HPE is also softening in the AFA business, with just 33% citing strong conditions, down 500 bps from the last survey. And in the next three months, 27% expect storage demand to be stronger or much stronger.

Discounting was mixed by vendors, as Dell EMC and NetApp ticked up a bit sequentially, while HPE and Pure Storage saw a modest sequential decline.

“Lower discounting at both HPE and Pure could explain softer results as HPE results ticked down a bit while Pure AFA data was stable sequentially,” UBS says.

And AFA remains strong overall, with about 52% saying demand was strong or very strong. Vendor performance was pretty consistent, with Dell EMC, NetApp, IBM and Pure “largely stable” sequentially while HPE was soft, with a 500 bps decline in “strong” responses compared to last quarter.