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Hyperscale Datacenters are Transforming the Storage System Market

December 11, 2014

Hyperscale datacenters, a major building block of cloud computing enabling millions of virtual servers to work together to accommodate massively fluctuating workloads, have been flexing their buying power this year. According to Gartner Group, original design manufacturers (ODMs) are actually changing their business models to ship servers directly to hyperscale datacenter customers and the market will reach $4.6 billion in revenues by 2018, accounting for 16 percent of worldwide x86 server shipments.

New data from IDC backs up those numbers, showing that the largest storage system market impact this year came from sales by ODMs to hyperscale datacenters. In fact, revenues from complete and partially built storage systems in this sector grew 22 percent for the third quarter of 2014 making up a whopping 43 percent of all capacity consumed.

The findings are part of IDC’s Worldwide Quarterly Disk Storage Systems Tracker report, which priced overall storage revenues at nearly $8.8 billion for that quarter. But hyperscale datacenters were the biggest disruptors in the space, literally transforming the way ODMs do business. The flexibility and customization afforded by ODMs essentially cuts OEMs almost completely out of the picture when it comes to hyperscale datacenters. This means that cloud and other service providers may design, procure and deploy new storage architectures quickly and affordably to meet their fluctuating needs.

“The relevance and size of these environments has expanded steadily over the last five years and many of these cloud players now offer cloud computing services that compete with on-premise server deployments for workloads, including Web, mobile, big data/analytics, social collaboration, etc.” notes the IDC report. “This increasing market influence and the importance of maintaining a holistic view of the storage market is what ultimately lead IDC to start tracking ODM Direct systems.”

Other interesting findings concern the open networked disk storage market, which is comprised of NAS and non-mainframe SAN, and which reached $5.1 billion in revenue, a 2.1 percent increase year over year. EMC led the market for this segment with 34.1 percent revenue share, followed by NetApp with a 14.7 percent share. EMC also led the segment for external storage systems supplies with 31.4 percent of global sales.

EMC is the overall leader for the worldwide total disk storage systems, followed by HP, Dell, IBM and NetApp. However, the company only experienced 3.5 percent growth in the third quarter from the third quarter of 2013, compared to 22 percent growth for the same timeframe for ODMs selling directly to hyperscale datacenter customers.

If you are interesting in hearing and seeing more about all aspect of how network infrastructures are transforming, ITEXPO East in Miami Beach, January 27-30, 2015 is the place to see the latest technology, and interact with industry peers and subject matter experts including community host Fiber Mountain’s Founder and CEO M.H. Raza who will be giving one of the keynote addresses.

Edited by Peter Bernstein

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