Flash a Bright Spot in Declining Storage Market

Posted on December 09, 2016 By Pedro Hernandez

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In a repeat of the previous two quarters, vendors sold $8.8 billion worth of enterprise storage systems in the third quarter (Q3) of 2016, reveals IDC's latest Worldwide Quarterly Enterprise Storage Systems Tracker data. On a year-over-year basis, however, that figure represents a 3.2 percent decline.

On the plus side, the all-flash storage array segment is growing like gangbusters. In Q3, the market segment generated $1.1 billion in sales, a 61 percent jump. Hybrid flash arrays attracted nearly twice that amount ($2.1 billion).

"The enterprise storage market closed out the third quarter on a slight downturn, while continuing to adhere to familiar trends. Spending on traditional external arrays resumed its decline and spending on all-flash deployments continued to see good growth and helped to drive the overall market," said IDC research manager Liz Conner, in prepared remarks.

"Meanwhile the very nature of the hyperscale business leads to heavy fluctuations within the market segment, posting solid growth in 3Q16," continued Conner. Catering directly to their hyperscale data center customers, original design manufacturers (ODMs) generated $1.3 billion in sales during Q3, a 5.7-percent annual increase.

data storage market

In Europe, the Middle East, and Africa (EMEA), the storage market decline was a bit more pronounced. Sales in the region totaled $1.49 billion, a 5.1-percent drop. The cloud deployment trend and an uptick in infrastructure consolidation projects contributed to the market tightening, noted Silvia Cosso, senior analyst at IDC European Storage Research.

On the other hand, the region is outpacing the overall market in its appetite for flash. Cosso stated that "the AFA segment kept very strong momentum in the region, almost doubling its shares compared to the same period a year ago, further improving workload consolidation."

The markets for all-flash and hybrid arrays climbed 76.4 percent and 3.5 percent year-over-year, respectively. Meanwhile, the traditional hard disk array market slipped 33.6 percent.

Having completed its acquisition of EMC in September, Dell Technologies sits comfortably atop the enterprise storage systems market with a 25.5-percent share of the market on revenues of $2.25 billion in Q3. Hewlett Packard Enterprise (HPE) takes second place with $1.37 billion in sales and a 15.5 percent of the market.

NetApp, IBM and Hitachi round out the top five in a statistical tie for third place. Each sold over a half-billion-dollars of data storage equipment to businesses and claimed market shares hovering around 6 percent.

Pedro Hernandez is a contributing editor at InfoStor. Follow him on Twitter @ecoINSITE.


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