Storage markets surge in Q1 2018

Storage systems revenue grew in Q1 by 4% to $7.8b and by 5% to $33b for the year to the end of March. However raw storage did better with disk drive revenues growing by 7% to $14.7b (by 9% to $63.0b for the year), DRAM by 22% to $9.0b (40% to $36.7b in the year) and NAND by a staggering 43% in the quarter to $17.1b (50% to $64.4b in the year). I am going to review the main trends in this post.

Of course raw storage devices are used in a great many products other than storage systems themselves – PCs, mobile phones, cloud datacentres, converged systems, etc. Each of the markets requires deep pockets for R&D, design and manufacturing. The high cost of semiconductor and disk drive fabrication plants has led to supplier disaggregation – gone are the days when vendors such as IBM and Hitachi made every thing from soup to nuts for their clients. The result is that there are few suppliers who have a significant market share in more than one of the three categories shown in the Figure.

We saw a number of interesting developments in the year to the end of March. In particular:

• Storage systems – Dell EMC remained the market leader, although its revenues declined slightly; IBM, NetApp, HPE (partially due to its Nimble acquisition), Huawei, Oracle, Pure Storage and Atos all managed strong growth; Fujitsu, NEC and troubled Violin Memory all saw a decline.
• Disk drives – Western Digital and Toshiba grew their revenues significantly, while Seagate’s declined slightly.
• DRAM/NAND – virtually all the suppliers did remarkably well with both SK Hynix and Micron growing their annual revenues by 70%; revenues fro Sony, Toshiba and Intel grew by 34%, 34% and 27% respectively.

The established storage systems vendors are turning their business towards software sales, becoming data management experts in the process. I intend to measure these components of their revenues in detail in future. They are suffering somewhat from the increased use of raw storage by large enterprises and those cloud service providers who prefer to build their own systems.

The growth in raw and systems storage has been in part due to the increasing focus on data governance – itself driven by the introduction of GDPR by the EU and digital transformation projects by large enterprises.

Find out more – I have lots of storage and raw storage data to help you with your business planning and market checks.