The latest IDC Storage Tracker numbers are out and in the spirit of recent analysis, I’ve put the numbers into my tracking spreadsheet.  The figures represent data for Q1, which now has 12 years’ worth of coverage.  With around 42% growth in the general storage hardware figures and 20% in external storage sales, the numbers look rosy, but do the headline figures mask a bigger story?

Figure 1 – External Systems Q1 2007-2018

Why Q1?

The original reason for using Q1 data was because that was the only consistent period I could get data for every year I’d been tracking.  For some reason, IDC had missing quarters of data, that I’ve since managed to locate.  Naturally, vendors have variable quarters depending on factors like their year end, so comparing individual vendor figures against each other isn’t really as useful as looking at long term trends for overall numbers of an individual vendor themselves.

The Data

So what do we see?  Figure 1 shows the numbers for total storage and external systems for each Q1 since 2007.   These are revenue figures, not product shipped, so the increase we see in external systems could (for example) be due to increased revenue from all-flash systems.  External storage sales remain relatively flat, however servers with storage has seen a huge increase (some 42%) over the figures for Q1 last year.

The biggest contributors to the increase are Dell EMC (43%) and the sales attributed to ODM Direct (80.4%) – sales directly to cloud hyperscalers.  Having said that, every vendor except IBM saw an increase.  What can we make of this?

  • Dell EMC has recovered well, after a number of years of decline.
  • IBM continues to decline, while claiming record storage sales – not sure how to interpret this.
  • Generally, the improvement in sales is in storage/servers rather than external appliances.

Figure 2 – Storage Systems Figures Q§ 1007-2018

ODM Direct

Of course the biggest takeaway here is the increase in sales to hyper-scalers.  We could speculate that a huge amount of data is being moved to public cloud, either as backup, archive or for analytics.  IDC claims the all-flash market is now $2.1 in revenue for the quarter out of $6.25 billion (around a third) and up 55% year on year.  I think it’s safe to suggest that on-premises refreshes are quickly moving to all-flash, while the bulk of new unstructured data is heading to public cloud.

Figure 3 – External Storage Q1 2007-2018

The Architect’s View

Purely looking at Q1, we haven’t seen such a big jump in numbers over the past 12 years of available data.  I’m curious as to how IBM’s figures are calculated, as this appears to go against what the company claims – unless of course they are highlighting only storage software sales and not hardware.  As we move forward, will Dell be able to keep the momentum going for Q2?  More important, are we seeing a real 2-tier market developing here, with everything not classed as primary storage being shipped to public cloud?  If so, that really tightens the market to appliance sales that can make real margin – the all-flash platforms.

Further Reading

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Written by Chris Evans

With 30+ years in IT, Chris has worked on everything from mainframe to open platforms, Windows and more. During that time, he has focused on storage, developed software and even co-founded a music company in the late 1990s. These days it's all about analysis, advice and consultancy.