Storage market plateaus – but doesn’t shrink

A set of storage racks

Posted on Thursday, September 22, 2016

The latest edition of IDC’s Worldwide Quarterly Enterprise Storage Systems Tracker has been published, uncovering some interesting findings in the process. Heading up their insights was the observation that total worldwide enterprise storage systems revenue remained flat year-on-year, worth $8.8 billion.

For some this trend should present something of a surprise. The explosive growth of cloud storage has been expected to decimate the storage market for some time. Obviously static sales is concerning for vendors, but it does prove that businesses are still buying storage in significant volumes – for now at least.

Winners and losers

As you would expect, there have been winners and losers in the marketplace. Perhaps in anticipation of the merger with EMC completing, Dell has recorded a 13.8% growth in revenue. And a drop in EMC sales, coupled with an increase in HP’s means that both companies now share first position in the list of top five vendors.

The biggest loser by far however has been the original design manufacturers (ODM) who experienced a 21.5 percent drop in sales. By far the largest fall in demand, the change in ODM fortunes suggests that there is change afoot in the storage sector – but not the one most analysts expected.

Something else is happening

With storage sales static, it is clear that vendors are still selling new units. But if storage needs continue to grow, and sales remain static, what is going on?

The answer – we think – lies in the raid adoption of software defined storage technologies. SDS allows businesses to commoditize their storage, using hardware of virtually any age and specification as the underlying disk infrastructure. Which means that rather than sourcing new units, they can redeploy existing assets into the pool. Backed by a suitable third party maintenance contract, they can do so virtually indefinitely.

Static volume sales are not the only reason this seems likely. The massive reduction in call for custom hardware also suggests that the industry is choosing commodity appliances and storage, rather than costly units that add to running costs and increase the time to ROI.

Whether SDS is simply a stop-gap before the cloud takes over completely, only time will tell. But according to the most recent statistics, on-site storage is still holding its own.

To learn more about redeploying your post warranty hardware as part of an SDS infrastructure, please give the CDS team a call. And don’t forget to register for our SDS seminar on the 22nd September, helping you to avoid the common pitfalls that can stymie this projects.