At the rate flash storage array shipments have been rising, 2018 could be the last year hybrid shipments are greater than the all flash array category. Revenue for flash performance arrays comprised 29 percent of the overall array revenue share in 2018, while hybrid performance arrays made up 38 percent. The IHS Markit forecast for 2019 flips the share of those categories, with all flash performance arrays growing 23 percent to reach 33 percent of array revenue share, and with hybrid performance declining 15 percent to reach 30 percent.

Hybrid performance arrays led with 38 percent of 2018 revenue shipped, but leadership expected to flip to all flash in 2019

At the rate flash storage array shipments have been rising, 2018 could be the last year hybrid shipments are greater than the all flash array category. Revenue for flash performance arrays comprised 29 percent of the overall array revenue share in 2018, while hybrid performance arrays made up 38 percent. The IHS Markit forecast for 2019 flips the share of those categories, with all flash performance arrays growing 23 percent to reach 33 percent of array revenue share, and with hybrid performance declining 15 percent to reach 30 percent.

“Storage vendor revenue has been helped by data-center technology refresh to flash for its performance, power and reliability characteristics,” said Dennis Hahn, senior analyst, IHS Markit. “NetApp and other vendors have claimed that while the majority of array factory shipments have transitioned to flash, there still is a substantial footprint of older spinning disk systems that still need to be replaced.”

Year-over-year server external storage revenue, including array and server expansion storage, rose 7 percent, reaching $9.8 billion in the fourth quarter (Q4) of 2018, according to the “Data Center Storage Equipment Market Tracker” from IHS Markit. The hybrid array category still led the array market at $3.5 billion, a year over year decline of 6 percent. However, the overall flash array category grew 40 percent over the previous year, to reach $3.2 billion.

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While the fourth quarter was a solid quarter for storage, there were still some signs of weakness. Total quarter-over-quarter server external storage revenue was flat, during a quarter where shipments are typically on the rise. Storage revenue for white-box vendors, declined from 33 percent share in the third quarter of 2018, to 27 percent in the fourth quarter, with cloud service providers slowing down their investment due to global economic uncertainty and saturation of existing DC storage capacity. In 2Q19, sales from traditional and white-box storage vendors are forecast to return to higher growth levels, and they will continue to drive strong storage-market growth.

In the foreseeable future, flash adoption will increase storage market growth, but other technologies are also becoming of interest in storage markets.  In the recent IHS Markit “Data Center Storage Strategies North American Enterprise” survey, respondents were clearly interested in non-volatile memory express (NVMe) drive-based flash arrays. These same respondents were also evaluating software-defined storage (SDS) networked arrays from IBM and other companies.  The ideas of SDS and openness bodes well for initiatives like the Open Compute Project (OCP), where interest is spreading from servers to storage. Data centers that are drawn to standards, but also require open choices for cloud-like storage, will lead OCP storage segment revenues.

Here are some additional data center storage equipment highlights from the IHS Markit report:

  • Total server external data center storage will reach $63 billion by 2023, up from $30 billion in 2018, for a five-year compound annual growth rate of 11 percent.
  • Capacity-optimized (i.e., spinning disk) arrays declined 4 percent, year over year, in 2018, as purchasing shifts to flash.
  • Enterprises accounted for 44 percent of storage equipment revenue in the fourth quarter, followed by cloud service providers with 41 percent and telcos at 14 percent.

Data Center Storage Equipment Market Tracker

With forecasts through 2023, this IHS Markit report provides quarterly worldwide and regional market size, vendor market share, analysis and trends for data center external. Vendors tracked include Dell EMC, NetApp, HPE, IBM, Huawei, Lenovo, Pure Storage, Hitachi and others.