Storage systems are vital to the IT industry. In 2022 spending grew by 2.2% to reach $37.9 billion, shipments, by 0.5% to 1.2 million, while the installed based reached 4.1 million – 2.9% up on 2021. In this post I’ll look at the market movements with comparisons to the development of HDD, NAND and DRAM.
Storage system spending has remained relatively stable for a long time – see the solid blue line in my Figure above that shows the hardware spend in comparison with three raw storage component types (the dotted lines). The sales of hard disk drives (HDDs) were once typically higher and are now typically lower than that of storage systems, since they have also traditionally been used in PCs and are now being replaced regularly by NAND flash. NAND and DRAM devices are also used in many devices other than storage systems (Cloud services, tablets, smart phones and other IoT products); their growth has been far stronger than that of storage systems across the period since 2003. During this period there has been a strong development of Storage Defined Storage (SDS) usage, which has brought with it the deployment of huge numbers of JBODs (just a bunch of disks). This demonstrates that there has been a decoupling of the development of the storage systems and raw storage markets. In effect end-users buy roughly equivalent numbers of storage systems (which have far higher capacity) every year independently of the much higher demand for the raw components that go into them.
My Figure above shows the growth in shipped storage capacity (measured in Exabytes) between 2003 and 2022 for the three raw storage types (shown on a logarithmic scale due to the inherent differences in price and capacity of each). In fact the total capacity of these devices shipped in 2022 was (just!) 1.9 Zetabytes, 21% down on 2021 and running roughshod over my prediction last year. It will be interesting to watch whether sales in 2023 go down as well.
Dell EMC is the market leader of the storage systems market; in 2022 it achieved a 28.2% share of the hardware market and 29.8% of the $20 billion storage software market. It was followed by HPE, NetApp and IBM as the next three in hardware and by IBM, Oracle and HPE in software analysis. These are all US suppliers; we have to look to Hitachi and Huawei in sixth and seventh position in hardware and Hitachi and Huawei in fifth and seventh in the software markets.
New suppliers have found it relatively easy to grow their business in the storage systems hardware market – witness Pure Storage, Huawei and even NetApp’s growth in my Figure above, which shows the annual revenues of the top suppliers by year. Dell’s positioned was enhanced by its acquisition of EMC in 2015, HPE has seen strong growth in recent years due to the provision of storage systems in its Greenlake activities, IBM has held on strongly to its position despite its offloading of its x86 server business in 2014, while Hitachi Vantara’s business has declined significantly since 2008.
The largest regional market for storage systems is the Americas (and especially the USA), which saw spending growth of 7% in 2021 and 10% in 2022. When measured in current dollar exchange rates, Asia Pacific (the solid pink line in my Figure above) has been larger than EMEA (the solid red line) since 2008; however, when measured in constant 2005 rates (for the Yuan Renimbi and Euro against the $US respectively), spending in EMEA has been higher than Asia Pacific since 2012.
Information Technology and Communications research
