The market for raw and system storage moves in strange ways – it’s not always upwards and its created more consolidation than in any part of the ITC market. Please read on if you want to find out the latest worldwide market shares, sizes and some ideas on where its all going.
The Figure shows the quarterly revenues of 5 basic areas of the market. It shows the gradual decline of the storage systems market, The higher peak, faster fall and slight recovery of the disk drive area, the steady rise in NAND sales and dramatic increase in DRAM.
- The storage systems market declined by 3.6% to $7.8b in Q2 and by -3.6% to $30.6b in the year to the end of June,
- Disk drive sales increased by 5.1% to $13.8b in the quarter and by 13.3% to $54.0b in the year.
- The solid state (NAND and DRAM combined) performed far better, growing by 42.0% in the quarter to $20.5b and by 27.8% in the year to $71.8b.
This Figure gives market shares for storage systems (of which Dell EMC is the standout leader with a 29.1% share), NAND and DRAM (where SK Hynix and Micron had more than twice the share of Sony in third place) and disk drives (where Western Digital is the market leader with a 35.4% share).
There’s a mismatch in many of the marketing pitches storage companies make when discussing market growth. I readily agree that there’s an ‘exponential’ growth in the amount of data being created in the world – it’s not just that the majority of the world’s population have (and are increasingly using) smart phones, tablets and PCs, but also that almost all everyday utensils, cars, gas and electricity supplies, government and business applications are spitting out digital data. The mismatch is when they jump from data to their own (or even the overall) storage market, which is not growing so fast. In practice the market in capacity, value and units of all categories of storage can go down in some quarters, even if its directory is upward. There are many reasons:
- The massive consolidation among NAND, DRAM solid state and disk drives has create a stochastic market, with their OEMs waiting for – and then ordering – devices with bigger capacities, which creates supply constraints.
- The vast majority of new data is going unrecorded (if an airliner creates 5PBs of data in a single long distance flight, it would take only a few days for the total capacity of the world’s storage systems to be full).
- The analytic and database applications are immature and not ‘fit for purpose’ in addressing huge unstructured data sets.
- A greater concentration on data governance has reduced some of the confusion of overlapping datasets among large and medium size users, increasing the efficiency of their storage systems and reducing the number of arrays they have to purchase for future capacity needs.
- Clever software startups are offering ‘software defined storage’ solutions which fast systems with large capacities to be built at fractions of the prices charged by traditional storage systems vendors.
In addition there has been a strong shift away from storage system and towards raw (and especially solid state) storage manufacturers, with users building their own systems in any cases.
However, in case I sound down about the opportunities for storage systems suppliers there are a number of forecast parameters which will drive the market upwards. For instance:
- Clever companies will find ways of using samples of monitored IoT data to build their business,
- GDPR and other data protection legislation will lead to better data governance and much wider use of encryption, eventually leading to an increase in spending on storage systems and devices,
- The increase in centralised computing for personal apps will require the installation of greater capacities in cloud service providers and other businesses building similar types of application.
There is bound to be some growth in the storage systems market in Q3 and Q4 simply from the strong performance of the solid state NAND and DRAM market in Q2, but I’m sure these markets will continue to go up and down rather than behaving ‘exponentially’.
You’ll need more data at the regional and country level for business plans (if you are an ITC supplier) or for selecting your storage supplier (if you are a buyer) – so please contact me if you need some help or fill in the form below to download our Storage systems service flyer and order form: