Disk Array Sales Cool Off In The First Quarter

June 16, 2014 Timothy Prickett Morgan

Here is something that a lot of people probably didn’t expect: Disk array sales took a dive in the first quarter of the year, particularly at the high end of the market.

According to the latest market research from IDC, the world consumed a total of 9.9 exabytes of capacity on the combination of internal and external disk arrays from January through March, representing a mere 19.9 percent increase in capacity on a year-over-year basis. In the fourth quarter, as we previously reported, total disk array capacity shipped was up 26.2 percent to 10.2 exabytes, reversing several quarters of downward trending shipments. Disk array revenues for the first quarter of 2014 fell 6.9 percent over the same quarter in 2013, to $7.32 billion, and that also represented a 17 percent decline sequentially from the $8.83 billion in revenues from the fourth quarter of 2013.

What’s going on here? Isn’t big data eating the world? Doesn’t disk array revenue just keep rising?

“The poor results of the first quarter were driven by several factors, the most important of which was a 25 percent decline in high-end storage spending,” explained Eric Sheppard, research director for storage at IDC. “Other important contributors to the market decline include the mainstream adoption of storage optimization technologies, a general trend towards keeping systems longer, economic uncertainty, and the ability of customers to address capacity needs on a micro and short-term basis through public cloud offerings.”

External and usually shared disk array revenues were down 5.2 percent year-on-year in the first quarter, to $5.62 billion. EMC saw revenues fall by 8.8 percent in this category to $1.64 billion, and lost a half point of market share. NetApp, which only sells external disk arrays like EMC, saw its sales more slowly than the market at large, by 2.8 percent to $854 million to be precise and giving it the number two slot in this category of storage. Hewlett-Packard at $498 million (down seven-tenths of a point) and IBM at $497 million (down 22.5 percent) were in a dead heat. Hitachi rounded out the top five with $493 million in revenues (down 6.8 percent). There are no shortages of storage startups and smaller players, who together brought in $1.66 billion in sales, up 3.7 percent. And remember–all of these numbers are for disk arrays and do not include flash arrays.

If you add in the disk arrays that are tucked inside of servers to the external arrays, then HP jumps to number two in the market with $1.11 billion, down 8 percent and costing the company a smidgen of share. Dell did not make the top five of external disk array suppliers, but its revenues from external and internal storage arrays together was $871 million, down a stunning 19 percent. The addition of internal disk arrays boosted IBM’s overall disk sales to $743 million, but it was still down 20.5 percent in the quarter. Other vendors accounted for $2.11 billion in total disk array revenues, up 6.8 percent, and the bleeding of the revenues on the part of the top five caused the overall market to swoon by 6.9 percent to $7.32 billion.

What is unspoken in here is the fact that servers and storage are converging, and that in many cases, you can’t tell what is a server or storage until you see the software running on it. And even when you do know the software, can you tell? Is a Hadoop node storage or serving? Well, it is in fact both. So how do you count that? Ditto on a converged system with a virtual SAN running across the disks in the server nodes. Is that a server or storage? Again, it is both. Convergence makes it hard to keep track of stuff, that much is for sure.

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