Disk storage market grows with inclusion of ODM vendors

IDC for the first time included original design manufacturers into its storage market analysis

Disk storage sales grew more strongly in the third quarter, helped by sales of non-branded storage gear sold directly to datacenters.

Third-quarter disk storage sales jumped 5.1 percent year over year, reaching US$8.8 billion, according to research firm IDC. This was a change from the anemic growth the market saw earlier this year, brought on by falling demand in mature markets.

Sales of server-based storage with high capacity were up 10 percent in the third quarter. But the big bright spot was the influx of storage systems from original design manufacturers (ODMs) which design and produce hardware to other companies' specifications. In the storage market, these manufacturers are bypassing traditional brands, selling directly to cloud service providers that put the equipment to use in hyperscale datacenters.

Similar trends appeared in an analysis of server market share published by Gartner earlier this week. It found that server purchases from ODMs by Google and Facebook were driving the market in the third quarter.

For the first time in its analysis of the storage market, IDC included ODMs' sales. In the third quarter, ODMs collectively posted the highest level of growth, with their storage sales up 22 percent year over year.

Although the ODMs' market share was only at 11.6 percent, the sales accounted for 43 percent of all storage capacity in the quarter.

IDC didn't identify the ODMs, but the prominent ones are based in Taiwan and include Quanta Computer, Wistron Group and Inventec among others. The ODMs typically offer unbranded products, and they've been steadily growing in the server and storage market by selling directly to Google, Facebook and Amazon Web Services.

Increasingly Web services and cloud providers are tapping ODMs to design and build new storage architectures, "with limited or no involvement from traditional IT original equipment manufacturers," IDC said on Friday.

With ODMs included in the mix, the market share of branded storage vendors all decreased. But EMC still held on to the top spot, with a 20.8 percent share, while HP held on to second place, with a 14.6 percent share.

All the top branded vendors experienced some growth in the quarter, except for IBM, which saw its revenue fall by 7.2 percent year over year.

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Michael Kan

IDG News Service
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