IDC has identified four pillars that will shape the growth and innovation in the information technology (IT) sector over the next decade or more. These pillars are:
- Cloud services
- Big data/business analytics
- Social media
Remarkably, each of these megatrends have a profound impact on how storage will be delivered, deployed and consumed; on development and adoption of new storage architectures; and on the way storage is managed. From this perspective, storage suppliers have to look at these growing segments that dictate the milestones for product roadmaps, including a variety of storage efficiency technologies, support for virtualized environments and multitenancy, scale-out architectures, standardization of hardware platforms and automation of data management.
On the other hand, the traditional, core storage technologies will continue to be in high demand worldwide, especially in emerging regions, which are in the process of establishing their IT and storage infrastructures. Matching existing technologies and roadmaps with current and future demands is always critical for vendors. However, storage has become more interrelated with other areas of IT, which impacts both supply and demand sides.
State of the market
Following the economic disruptions of 2008-2009, the enterprise storage systems market has entered a period of a stable growth. Although in 2011 some segments of the market were impacted by short-term developments in the industry, the overall shape of the market is being defined by longer-term trends.
End user spending on enterprise storage systems will grow at 4.9% five-year compound annual growth rate (CAGR) in 2011 to 2016 and is forecasted to reach $42.4 billion by 2016. The external storage segment, which will account for 76.7% of this amount, will grow at 5.3% CAGR, while internal storage will be growing at 3.5% CAGR. This level of spending remains in line with IDC's previous expectations.
Growth in shipped storage capacity has been revised downward as the industry is impacted by adoption of technologies that help end users to boost storage utilization rates, optimize amount of data to be stored and utilize various storage delivery models. Additional downward pressure is expected to impact storage capacity growth in the short term as the industry will be experiencing a rippling impact from increased hard disk drive (HDD) prices and, in some cases, HDD shortages caused by last year's flooding in Thailand. In the current forecast, IDC expects that shipped storage capacity will grow at 37.0% five-year CAGR and will reach 107.4 exabytes (EB) by 2016.
Price erosion at the price-per-gigabyte level is expected to slow down to a five-year CAGR of -23.5% (compared with the historical rate of 30% to 35% annual decline), as the mix of media types used in storage systems is leaning toward capacity-optimized hard disk drives, which are most impacted by price actions caused by HDD shortage, and increasing, although still minor, adoption of solid state storage carrying a higher price per gigabyte.
End user spending in all open network storage segments will be increasing during the forecast period, while spending on mainframe and external directly attached storage will be declining. The Fibre Channel SAN segment will remain the largest segment, accounting for 42.6% of end user spending by 2016, although it will be the slowest growing, at 3.3% CAGR. However, spending on Ethernet-based storage, which includes NAS, iSCSI SAN and Fibre Channel over Ethernet (FCoE), will surpass spending on FC SAN storage by 2015.
Spending on entry-level and mid-range external storage (systems priced under $25,000 and $25,000 to $249,999, respectively) will grow at 8.2% and 7.7% five-year CAGRs, respectively, while the high-end segment spending will decline at 2.0% CAGR. This growth will be driven by the overall trend toward modular solutions.
NATALYA YEZHKOVA is a research director within IDC's Storage Systems program. In this position, Ms. Yezhkova leads the forecast for the worldwide disk storage systems market, provides custom research and consulting services to IDC clients and leads an analyst team for the Quarterly Worldwide Disk Storage Systems Tracker. For more, visit www.idc.com.