Let’s take a trip down memory lane. Around 10 years ago, EMC ruled the roost in data storage. It held a 21.6 percent revenue share in Q3 2007 according to IDC. IBM and HP were next with a combined 25 percent.
Top 5 Vendors, Worldwide External Disk Storage Systems Factory Revenue, Third Quarter of 2008 (Revenues are in Millions)
3Q08 Market Share
3Q07 Market Share
3Q08/3Q07 Revenue Growth
Today, Dell EMC accounts for 35 percent of the total, with the combined share of IBM and HPE having fallen to 20 percent. Much has certainly changed in storage during that period.
And yet, a lot has stayed the same.
The big players are still the same. Back then, NetApp and Hitachi rounded out the top five or six and that remains the same today.
Top 5 Vendors Groups, Worldwide External Enterprise Storage Systems Market, Fourth Quarter of 2016 (Revenues are in Millions)
4Q15 Market Share
1. Dell Technologies
T2. HPE/New H3C Group*
Source: IDC Worldwide Quarterly Enterprise Storage Systems Tracker, March 3, 2017
But the technology basis for the industry has turned on its head. A decade or so back, Dell was largely a server vendor. In Q2 of 2006, it accounted for only 10 percent of server revenue. IBM and HP utterly dominated with 65 percent, followed by Sun with 13percent and Fujitsu Siemens at 4.5 percent.
These days, the combined share of IBM and HPE is down to a third, per Gartner’s Q4 2016 server revenue report. Dell is challenging HPE for the top spot, and newcomers like Huawei and Lenovo have displaced Sun/Oracle and Fujitsu.
Dell played its cards smartly. Rather than attempting to compete with IBM and HPE in the high-end UNIX server, Sun SPARC and mainframe space, it stuck to its own strength in x86 servers and open systems. Accordingly, it quickly become the leader in the external Windows/Linux disk array market. It followed this with a series of smart acquisitions such as EquaLogic. That gave it a leading position in what was the booming iSCSI SAN business in the mid-2000s.
Worldwide: Server Vendor Revenue Estimates for Second Quarter of 2006 (U.S. Dollars)
Market Share (%)
Market Share (%)
As such, Dell leveraged its strength in x86 servers to gain steady ground in data storage. Looking back, it was a stroke of strategic brilliance. Others clung to their traditional strengths in Fibre Channel (FC) SAN and enterprise-class proprietary systems. Dell nibbled away at the SMB and midmarket, moving steadily up the food chain. Who could have predicted 10 years ago that it would gobble up EMC?
Worldwide Server Vendor Revenue Estimates, 4Q16 (U.S. Dollars)
4Q16 Market Share (%)
4Q15 Market Share (%)
4Q16-4Q15 Growth (%)
Source: Gartner (March 2017)
Ten years ago, the hot-ticket items were iSCSI SANs, the use of SATA/SAS disks for storage tiering, NAS and green storage. IDC analyst Liz Conner recently named software-defined storage (SDS), cloud-based storage, all-flash systems and converged systems as today’s key areas. None were on the radar in 2007.
“The storage technology that is making a significant disturbance in the market at the moment is SDS, which decouples the raw storage from the storage virtualization logic, while adding scale-out capabilities,” said Goran Garevski, vice president of engineering, Comtrade Software. “Today, one can find it in numerous areas like storage virtualization solutions, hyperconverged infrastructures, scale-out file systems, public and on premise clouds.”
Greg Schulz, an analyst with StorageIO Group, agrees with regards to SDS. But he added all-flash, the elimination of backup, and object storage to the list of major changes in data storage technology. He also mentioned the slowed than predicted shift to the public cloud.
Schulz has a long memory for faulty forecasts. He noted that many storage startup CEOs back in the 2008 timeframe made statements that storage would be all SSD with no more HDDs within a couple of years. None remain as CEOs, he said.
He added that the adoption of hybrid cloud and hybrid converged server storage has appeared more rapidly than many expected. And despite firm pronouncements of their demise, FC, tape and HDD are still very much with us.
“HDDs and even tape continue to find new roles,” said Schulz.
The King is Dead, Long Live the King
We have a new king of the storage universe. Dell emerged from the pack as the eventual purchaser of EMC. But Schulz said a move for EMC had been on the cards for years from several quarters.
“EMC being acquired was not surprising; the bigger surprise is that Cisco, HPE, NetApp or Oracle have not done a larger acquisition than they have,” said Schulz. “HDS, Oracle along with some others are not as dominant or at least heard from as in the past.”
“There are many ‘puffer fish’ whose marketing and PR made them look bigger and more promising,” said Schulz.
He named Nirvanix and Violin as a couple of examples.
He lists many who have faded or been acquired. LSI sold off Engenio to NetApp, then sold the remaining business to Avago. Following that, Avago sold the flash SSD business to Seagate; then Avago bought Broadcom and changed its name. Broadcom acquired Emulex and now Brocade among others. Further upheavals included WD buying HGST and many more. Its big competitor Seagate purchased Xyratex, DotHill and others.
Certainly, the next ten years will hold more changes that we cannot even imagine now.
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