Cloud washes Dell off perch atop storage market

Backup appliance sales go off a cliff, traditional array vendors just aren't growing

Sales of purpose-built backup appliances have dropped markedly, with year-on-year dips of 16.2 per cent by revenue and 14.9 per cent by capacity, according to analyst firm IDC's Worldwide Quarterly Purpose-Built Backup Appliance Tracker for 2017's second quarter.

IDC's research manager for storage systems Liz Conner said: "The traditional backup market is declining as end users and vendors alike explore new technology." She mentioned "cloud-based backup tiers, hybrid flash arrays, emphasis on replication and data recovery" as reasons for the market's decline.

Here are the nasty numbers.

Vendor 2Q17 Revenue 2Q17 Market Share 2Q16 Revenue 2Q16 Market Share 2Q17/2Q16 Growth
Dell $404.30 55.50% $557.60 64.20% -27.50%
Veritas $126.10 17.30% $115.60 13.30% 9.10%
IBM $58.60 8.00% $49.00 5.60% 19.50%
HPE $34.90 4.80% $32.10 3.70% 8.70%
Oracle $28.00 3.80% $17.10 2.00% 63.40%
Others $76.60 10.50% $97.40 11.20% -21.30%
Total $728.50 100.00% $868.90 100.00% -16.20%

Source: IDC Worldwide Purpose Built Backup Appliance Quarterly Tracker, September 21, 2017. Revenue recorded in millions

Conner says the backup appliance market is following "a similar trend to the enterprise storage systems market" in terms of flash and cloud making inroads.

In the traditional array business, it's mostly cloud that's changing spending patterns, according to last week's release of IDC's Worldwide Quarterly Enterprise Storage Systems Tracker for Q2.

That survey found "factory revenue" of US$10.8bn, up 2.9 per cent year over year. Capacity grew even faster, up by 16.5 per cent to 65.3 exabytes.

But none of the big enterprise array vendors achieved year-on-year growth. The market for hyperscale storage, however, shot up. Server-based storage declined 13.4 per cent during the quarter and while external storage systems hauled in $5.3bn, that was down 5.4 per cent year-over-year.

Here's the rather nicer numbers.

Vendor 2Q17 Revenue 2Q17 Market Share 2Q16 Revenue 2Q16 Market Share 2Q17/2Q16 Revenue Growth
HPE $2,170.30 20.10% $2,500.20 23.80% -13.20%
Dell $1,993.00 18.40% $2,717.10 25.90% -26.70%
NetApp $694.60 6.40% $595.40 5.70% 16.70%
IBM $566.30 5.20% $568.50 5.40% -0.40%
Hitachi $412.60 3.80% $429.00 4.10% -3.80%
ODM direct $2,520.20 23.30% $1,452.60 13.80% 73.50%
Others $2,451.30 22.70% $2,238.10 21.30% 9.50%
All Vendors $10,808.20 100.00% $10,500.90 100.00% 2.90%

Source: IDC Worldwide Quarterly Enterprise Storage Systems Tracker, September 14, 2017. Revenue recorded in millions.

Dell EMC can't be enjoying either tracker because its own sales are slipping and it seems not to be winning the hyperscale deals it has often said are within its reach. At least it can dismiss HPE's ascent to top spot as having been bought rather than grown: this is the first quarter in which IDC's added Nimble Storage to HPE's numbers.

Another thing to note: hard-disk-centric arrays are still doing just fine. The tracker says all-flash machines "generated over $1.4 billion in revenue during the quarter, up 37.6% year over year" while hybrid flash arrays scored "$2.1 billion in revenue and 19.6 per cent of the total market share".

The media used by hyperscale stuff is hard to assess, but if we take that market segment's $2.5bn out of the $10.8bn in total revenue, the combined $3.5bn for flashy machines is less than half of the remaining $8.3bn. But flash is growing fast. No wonder Western Digital is fighting hard to get its claws on part of Toshiba. ®

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