The external enterprise storage systems market is expected to grow by just single-digit compounded annual growth rate (CAGR) during 2019-2024. The first quarter of 2020 witnessed an approximate 20 per cent fall in revenue in this sector, as companies reduced IT spending and opted for the public cloud.
As per IDC’s latest ‘Worldwide Quarterly Enterprise Storage Systems Tracker Q120’ release, India’s external storage market witnessed a decline of 20.6 per cent year-over-year (YoY) by vendor revenue and stood at US$ 87.8 million in Q1-20 (January-March). The majority of the decline was seen in professional services, manufacturing and telecommunications organisations.
According to Dileep Nadimpalli, research manager, enterprise infrastructure, IDC India, “Due to COVID-19, most of the organisations have reduced their IT spending for 2020. Businesses are revisiting their capex and will invest only if there is a pressing need, else will opt for the opex models. Organisations are moving to the public cloud (for backup and DraaS or Disaster Recovery-as-a-Service) so that they can avoid capital expenditure in these hard financial times.”
All-Flash arrays (AFA) contributed 37.6 per cent to the overall external storage systems market in Q1-20 (January-March). With the advent of Nonvolatile Memory Express (NVMe), more organisations are expected to adopt new-age Flash technologies to address the growing demand for high-density applications such as artificial intelligence, machine learning/deep learning, real-time analytics, etc.
High-end storage systems grew by 3.7 per cent YoY due to increased investments from banking and government organisations in Q1-20. The entry and mid-range storage segments witnessed a steep double-digit YoY decline through the same January-March period.
Due to cash flow issues, organisations are expected to delay their IT spending on technology refreshes, but are predicted to spend on new projects which will drive automation, increase performance, and optimise costs. Businesses will prioritise projects related to digital transformation, IoT, artificial intelligence, etc, in the near future.
Dell Technologies continued to be the market leader with a 31.4 per cent market share by vendor revenue, followed by Hewlett Packard Enterprise (HPE) with a 15.9 per cent market share in Q1-20. Hitachi and IBM witnessed strong YoY growth over the same period due to key wins from government and banking organisations, respectively.
The IDC India forecast
The external enterprise storage systems market is expected to grow by just single-digit compounded annual growth rate (CAGR) for the 2019-2024 time period. IDC expects storage spending to decline in 2020 after a couple of strong YoY growth numbers seen in the past consecutive years, and this drop will be primarily due to the COVID-19 impact.