Hyperscale Data Center Demand Lifts Enterprise Storage Market in Q1

By Pedro Hernandez

EMC took the enterprise data storage crown once again during the first quarter (Q1) of 2015, but Hewlett-Packard (HP) is closing in.

Vendors generated over $8.7 billion in sales worldwide last quarter, a 6.8 percent improvement over the same year-ago period, due in part to growing demand from hyperscale data center operators, said IT research firm International Data Corporation (IDC). In terms of storage capacity, they shipped 28.3 exabytes, a 41.1 percent year-over-year increase.

Storage systems providers aren't the only ones capitalizing on the hyperscale data center boom. In Q1, server shipments jumped 8.4 percent while worldwide revenue increased 17.2 percent, revealed IDC on May 27.

Hopkinton, Mass.-based EMC generated over $1.5 billion in storage sales in Q1, a 6.7 percent decrease compared to the first quarter of 2014, but enough to hold onto the top spot. Meanwhile, HP's storage revenues surged 19.3 percent to nearly $1.3 billion and 14.6 percent of the market. Dell, NetApp and IBM rounded out the top five.

In April, during an earnings conference call for investors and analysts, EMC's CEO, Joe Tucci, acknowledged that its Information Infrastructure business had taken a hit in Q1.

Despite $5.6 billion in company-wide revenues, a 2 percent year-over-year gain, the company's enterprise data storage units missed by an estimated $75 million. "About two-thirds of this miss was due to the fact that we didn't execute as crisply as we normally do. The other third was due to negative geopolitical effects in Russia and China that slowed down bookings," he said.

EMC also maintained its lead in the networked disk storage (NAS and non-mainframe SAN) category with 29.8 percent revenue share, followed by NetApp with 15.6 percent. EMC and NetApp again ruled the $5.6 billion market for external disk storage systems in Q1 with over 27 percent and 13 percent of the market, respectively.

"Following a busy end-of-year spending environment, the enterprise storage market fell back into what has become a familiar market pattern," observed IDC research director Eric Sheppard, in a statement. "Spending on traditional external arrays fell during the quarter while demand for server-based storage and hyperscale infrastructure was up strongly during the quarter."

Direct sales from original design manufacturer to hyperscale data center customers accounted for 12.6 percent of storage system spending in Q1.

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

Photo courtesy of Shutterstock.

This article was originally published on June 08, 2015