IDC: Storage growth slowing to normal

Enterprises are no longer catching up from limited recessionary budgets, the research company said

Growth in sales of enterprise disk storage slowed in the third quarter as the industry returned to normal patterns after recovering from the recession, according to research company IDC.

Total revenue for all disk storage systems grew 8.5 percent compared with last year's third quarter, IDC said on Friday. By contrast, year-over-year revenue growth in the second quarter was more than 10 percent, according to IDC's Worldwide Quarterly Disk Storage Systems Tracker. Before the recession that began in 2008, typical year-over-year revenue growth in storage was in the high single digits, IDC analyst Liz Conner said.

Buyers also expanded their storage capacity at a slower pace than in the second quarter, IDC said. The systems shipped in the quarter added up to 5,429 petabytes, up 30.7 percent from a year earlier. In the second quarter, it had grown by 46.7 percent from a year earlier.

Enterprise storage revenue totaled $7.6 billion in the quarter, of which EMC took 21.7 percent. Revenue for external disk storage, a figure that excludes disks located inside servers, increased 10.8 percent to just under $5.8 billion. EMC expanded its share of that market to 28.9 percent from 25.9 percent a year earlier, according to IDC.

Most organizations are investing in storage just to keep up with the growing amount of information their operations are generating, Conner said.

"A lot of it is just tons and tons of data being created," Conner said. But new applications, especially cloud computing services, also are driving capacity purchases, she added.

In the external storage market, EMC's closest rival was IBM, with a 12.7 percent share, statistically tied with NetApp, which grew its share to 12.1 percent, according to IDC. EMC continues to gain market share because it is successful in most categories, including high-end, midrange and low-end systems, as well as products for cloud storage and big data, Conner said.

"EMC has kind of got the bases covered, which ... makes it very difficult for other companies to compete," she said.

The recent flooding in Thailand did not affect the market in the third quarter and probably won't have its biggest impact until the first and second quarters of next year, Conner said. IDC believes manufacturers are likely to ship between 70 percent and 90 percent of the number of drives they normally would have. Even then, "it's not going to be a drastic impact, we don't think," Conner said.

Even then, enterprise external storage systems are likely to be the least affected, Conner said. Vendors usually give those products higher priority than other categories because they represent higher margins. And the floods are likely to affect the capacity shipped more than the revenue collected, because scarcity will tend to increase drive prices. However, during the shortage, it may be more common for enterprises to purchase disk storage systems with less than a full complement of drives, Conner said.

(IDC is a division of International Data Group, the parent company of IDG News Service.)

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

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Stephen Lawson

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