At the end of last week, IDC published their latest storage market tracker.
Once you get past the obvious headlines (storage market is growing, EMC is growing share, etc.), I usually spend some time poking around the results to see if there are any interesting insights worth sharing.
While the specific results themselves don't offer any revelationary insight; when juxtaposed with other industry going-ons, an interesting picture often emerges.
And, while the IDC report may be the best we have today; there's clearly an opportunity emerging for an expanded analyst view of what's going on the storage world.
The State Of The (Storage) State
Chris Mellor over at El Reg does a humorous job of reprising the IDC results here.
IDC works from estimates; for example, EMC does not directly disclose to IDC what we've sold in a given quarter. Most of the time, their estimates are reasonably close to what we see in our own business at an aggregate level; IDC's task gets progressively tougher as they drill down into increasingly narrow technology or geographic segments.
We, like most vendors, run the IDC findings through our own internal filters to get a view that more closely matches to the things we're interested in here at EMC. For example, while IDC doesn't track "scale-out block storage" as a category (think high-end enterprise arrays), we can sort of get at the number by adding and subtracting other data elements.
Disclaimer: these "altered views" are not sanctioned or endorsed by IDC. Some vendors -- in an effort to put things in a positive light -- will promote their own filtered view of IDC's data. When you see it, keep in mind that's not exactly kosher.
Storage Does Well -- Again
The overall storage market appears to be in rude health; over $6b of external storage was sold in Q2, growing 6.5 percent from this time last year.
More broadly, Y/Y external storage growth rates seem to be on a gentle decline though since Q2 2010's outrageous 22% -- interestingly enough, a popular "founding date" for so many storage startups :)
We in the storage biz should consider ourselves fortunate; compare storage market growth rates to the flat-to-shrinking revenue in other categories of infrastructure; it's clear that -- even though unit costs for capacity continue to drop -- aggregate demand is increasing, sort of like you'd expect.
It was true 20 years ago, and it's still true today: as per-unit costs drop, people consume more. Evidently, a lot more.
EMC Does Well -- Again
According to IDC, EMC's revenues in the external storage category grew 13.1% y/y, resulting in an additional 1.8 points of market share. Sequentially, 5.2% growth and 1.4 points of market share.
Historically speaking, those are meaningful swings.
Dig down to the next set of detail, and the EMC picture is fairly compelling.
Scan across IDC's major categories (external disk, external RAID, networked storage, open SAN, iSCSI, NAS), and you'll notice that EMC is a clear #1 in all categories except one: iSCSI SAN where Dell has 28.3% market share, and EMC has 20.4%
Geographically, EMC is #1 in external storage for all geographies (US, Western Europe, Japan, Asia Pacific, Rest of World) with the exception of Japan where EMC is an erstwhile #2 behind Hitachi.
It goes without saying: thank you to all of our customers and partners around the globe. We appreciate the confidence you're putting in us.
A Few Insights Emerge
Conventional wisdom in the storage industry is that price points are moving downmarket to more cost-effective entry units.
Well, IDC is painting what looks like a different picture this time around. In the $0-$25k "entry category", IDC shares that the market shrank 3.3% year over year, but also grew 4.4% sequentially. Since I don't have historicals, I can't offer any more comment -- other than this segment bears watching.
If you're wondering which vendor leads this segment, it's the category of "other" with 35% of the market -- "other" being a gaggle of smaller vendors, none of which are tracked separately by IDC in this report.
Thanks to the VNXe, EMC now comes in third among branded vendors, trailing behind Dell and HP. More work to do!
Moving up to the next price band ($25k-$250k), we see the opposite picture: great year-over-year growth (over 11%) coupled with a slight sequential de-acceleration (~1.4%). According to IDC, EMC leads this segment with ~32%.
I can't help but point out that -- according to IDC -- NetApp saw a decline in branded FAS3000 and FAS6000 revenue both year-over-year and sequentially. Ditto for Dell's EqualLogic. From my personal perspective, neither has done a good job of keeping up with current tech -- and it's starting to show.
Moving up again to the $250k+ category, we see 4.6% year over year growth, yet flat sequentially. Not surprisingly, EMC does well here with over 45% of the market, and increasing share. Yes, big storage arrays are still in vogue :)
As one scans across the technology flavors (e.g. networked, open SAN, NAS, iSCSI), nothing really jumps out one way or another in terms of growth areas.
We're Going To Need A New Measuring Stick -- And Soon!
IDC has done a great job over the years in supplying the industry with a generally accepted market scorecard. But things are moving fast in this space, creating an opportunity for new measurements and new segmentations.
Consider the following:
- In a world of converged storage protocols (block, file, object), how do you effectively count a single device that is intended to play multiple roles? The old "open SAN vs. NAS" distinction gets more blurry with every passing year.
- We now have more than a few real-deal scale-out architectures in the marketplace (e.g. Isilon), and there will undoubtedly be more. You start with a modest set of modules, and then simply add more as your needs grow. So -- what price category do those things go into? The modules fit into one price band; their aggregate use fits into another.
- How do you count flash that isn't in an array? EMC now offers VFcache, which is clearly part of the storage hierarchy. And, before long, we'll be formally announcing Thunder for use in the storage network. Some of these devices are persistent storage, some are non-persistent caches, some are a bit of both depending on how you configure it.
- And, while we're talking flash, maybe consider an emergent category for the newer all-flash designs, as they're a meaningful departure from the previous disk-centric approaches?
- IDC tracks usage "by operating system": the familiar UNIX, Windows, Linux, etc. While that's been useful in the past, most of us are now more interested in "by hypervisor": VMware, Hyper-V, Xen, etc.
- IDC (and other vendors) track storage hardware one way, storage software another. Sometimes these are separate buying decisions that are made independently; often they're not -- the array comes packaged with a whole slew of software features. Again, the traditional lines continue to blur.
- Finally, all of us have a growing interest in how storage is consumed: is it sold directly, through a partner, delivered as a service, wrapped into a converged infrastructure? Currently, IDC uses the familiar "as sold" model that's quickly giving way to an "as consumed" model.
Again, this isn't meant as a criticism of IDC or any other analyst firm, just a recognition that this market is transforming very quickly indeed, and we may need some new metrics.
The Storage Market Continues To Thrive
I got interested in this space about 20 years ago. At the time, none of my colleagues could understand what could possible be so engaging about the topic. I kept blabbering "hey, it's where information lives" but didn't do a good job of making my point at the time.
These days, the storage industry is as vibrant as ever, as evidenced by having more than its share of startups. I used to try and track them all, now I don't even bother.
Collectively, their existence is a good thing for the industry -- it shows we're collectively attracting talent and capital. Customers win, because it keeps all of us established vendors on our game.
And that doesn't show any sign of slowing down soon ...