Worldwide manufacturing of IT and communications equipment has a massive – and growing – bias towards Asia Pacific, so it’s hardly surprising that the region generates a lot more revenues for the suppliers than either the Americas or EMEA. In this post I will outline the main movements of raw and system storage markets.
There has always been a huge difference between the component and systems suppliers in the storage market in the customers they sell to (OEMs for the former and end-users typically for the latter), the type of manufacturing (mass production v integration); so it’s hardly surprising that each sub-market has very different participants. Dell EMC is the clear leader in the storage systems market (see Figure) – it generated a 28.4% share of this $32 billion market in 2017. The next three largest suppliers HPE (10.3%), NetApp (10.1%) and IBM (6.9%) have a long way to go to catch up, despite Dell EMC suffering somewhat from their merger announced in 2015. The disk and optical drive market was almost twice the size ($61 billion) and was dominated by Western Digital, Seagate and Toshiba, who took 32.7%, 17.4% and 16.2% of this market respectively. In fact these are the last vendors standing in a massively consolidated market. Despite being much younger the solid state disk (NAND and DRAM) market has also being going through extensive consolidation in the last few years; SK Hynix (27.8%) and Micron (25.1%) were by far the largest suppliers in 2017; this sub-market was worth $96 billion – much more than either of the other two areas.
Putting storage systems and raw storage in the same chart is problematic, because there’s a significant overlap of the raw drives being used in the systems and raw storage is used in client and mobile devices, which now account for more than half of their sales. Nevertheless I think it’s useful to see how the revenues of the various types of storage are moving (see Figure). It’s interesting that the value of the NAND market is about to overtake that of disk drives and that DRAM sales are doing the same to storage systems revenues. Of course the storage systems vendors are very keen to tell us about their ‘all flash’ drives and the progress they’re making in shifting the balance away from spinning disks; nevertheless hard disk drives still offer significant price/GB advantages over NAND/DRAM products. Being more mature also means that they don’t need to be adjusted to accommodate new protocols and processing techniques. For anyone thinking that hard disk drives will disappear from the market any time soon, it’s worthwhile remembering that some thought the first Winchester disk drives delivered by IBM in 1956 would kill the tape drive market begun a year earlier.
I’m in the process of drawing up a taxonomy in order to look into other areas of this massively important market (see Figure). Over the last few years the storage market has been disaggregated, creating a number of horizontal markets and ecosystems which have a growing influence on the revenues of the various suppliers. My Figure shows the relationships and overlaps between storage software and storage systems. I’m already measuring the server, CI/HCI, storage system, raw storage, client, mobile and IoT devices markets. My intention is to add storage software, VDI and virtualization management areas in order to create a more complete picture of this – now highly – disaggregated market.
Please let me know if you’d like to get involved.