Omdia Study: 98 Percent of Enterprises Are Consolidating Infrastructure as Component Costs Reset

VergeIO, the developer of VergeOS, published Navigating the Great Enterprise Storage Squeeze, multi-client research conducted by Omdia and commissioned by VergeIO among 400 North American IT professionals with direct storage and infrastructure responsibility.

98% of those organizations are consolidating infrastructure layers or exploring it. Among organizations that do not run SDS today, it ranks as the technology most commonly slated for significant investment in response to the shortage.

The research was fielded in May 2026. 74% of respondents sit at senior management level or above, and their organizations range from 500 to more than 20,000 employees.

A demand event, not a supply failure
Prior storage shortages followed a familiar pattern. A flood, a fire, or an earthquake broke something, supply fell, prices spiked, and the industry rebuilt until the long slide in cost per terabyte resumed. Nothing broke this time. Supply creation sits at record levels and continues to rise. What changed is that hyperscalers building AI infrastructure walked into the market with budgets that have no practical ceiling and bought the industry’s output.

The public price record makes the scale plain. TrendForce put conventional DRAM contract prices up 90 to 95% in the first quarter of 2026 alone, a record, with enterprise SSD contract prices up 53 to 58% in the same quarter. Western Digital sold out its entire 2026 hard drive production and signed long-term agreements running into 2028. Seagate has allocated the vast majority of its nearline EBs into calendar 2028 and reports customers asking to plan for 2029. Charles Giancarlo, chairman and chief executive of Everpure, told customers in April that prices had risen roughly 70% since January. That increase lands on top of a decade in which per-terabyte prices fell about 20% every year.

The supply side has chosen not to build its way out. Seagate closed its fiscal year at a 52.7% gross margin with incremental margins above 60%, and guided capital expenditure to 4 to 6% of revenue. Micron’s Singapore fab produces nothing until the second half of 2028. Every capacity plan, refresh cycle, and three-year budget model in the enterprise rested on the assumption that storage gets cheaper each year. That assumption broke in four months, and no major forecaster has prices returning to 2025 levels inside their horizon.

“Is this the new normal? This isn’t going away anytime soon. That realization is what turns this from just the cycle we typically go through into ‘Wow! I need to start thinking about my environment in a different way,” said Simon Robinson, Chief Analyst, Omdia.

Buyers reached for architecture before they reached for procurement
The most consistent response in the study is structural rather than transactional. 98% of organizations are consolidating infrastructure layers, meaning they are combining virtualization, storage, networking, or data protection into fewer platforms, or actively exploring how to do it. 2% are not considering it at all. Omdia’s own language in the research indicates that consolidation has moved from optional optimization to existential necessity, and that organizations are no longer debating whether to consolidate but how quickly they can execute.

Omdia also asked which storage technologies organizations plan to invest in as a direct response to the shortage. Buyers who do not run SDS today ranked it first out of eight options, ahead of cloud storage, on-premises object storage, hybrid arrays, and all-flash arrays. Hyperconverged infrastructure placed sixth.

“We were surprised by the number of organizations that are considering SDS as a potential solution. HCI is the epitome of software-defined, and VergeOS deserves serious consideration,” said Simon Robinson, Chief Analyst, Omdia.

74% of respondents also report evaluating ways to integrate data protection and disaster recovery more closely with primary storage, with the stated goal of reducing total hardware footprint. At current component prices, a second copy of production sitting on a second set of arrays with its own refresh cycle is the most expensive redundancy in the building.

“Buyers put SDS at the top of that list without anyone prompting them, and our read is that they did it because software that does not care which hardware you bought is the durable answer to a hardware supply crisis. Nobody makes flash cheaper. We do not, and neither does anyone else. What a platform can change is how much flash the environment needs to buy and which flash the customer is allowed to buy. VergeOS runs global inline de-dupe across the entire pool rather than per volume. It runs mixed media in the same environment, so a customer buys whatever the market has in stock that quarter. It folds backup and disaster recovery into the footprint the primary workload already occupies,” said George Crump, CMO, VergeIO.

The AI build-out is crowding out enterprise AI
The circularity in this market deserves a board-level conversation. Hyperscalers bought the memory and flash supply to build AI infrastructure, which raised the price of the storage that enterprise AI initiatives now need. 74% of the organizations Omdia surveyed say the shortage is slowing their ability to deploy AI infrastructure on premises. The companies that caused the constraint are the ones best positioned to sell their way around it.

Live webinar, August 20, 2026
Simon Robinson joins VergeIO’s George Crump and Dave Vincent on Thursday, August 20 at 1:00pm ET for a 60-minute session.
Titled The Software-Defined Answer to Hardware Inflation, walking through the study data, what the price record says about how long the constraint lasts, and the architectural responses that hold up under it. Registration is open here.