Legacy storage vendors gain in cloud era, IDC says

External storage systems are all-but-obsolete in the software-defined era.  At least that’s the fable shared repeatedly across the industry. But cloud and enterprise customers are collaborating to write a different tale, featuring legacy storage as a central character.

Similar to the “tape is dead” mantra and the predicted demise of Fibre Channel, legacy storage array vendors continue to hold their own, combining with original design manufacturers (ODMs) to ship nearly 114 exabytes of capacity last quarter, according to the latest tracking numbers by analyst firm IDC. That represents a 57% jump in total shipments year over year.

Factory revenue from external storage systems grew 19% worldwide to top $14 billion.  Enterprise customers contributed $6.3 billion to the market, up nearly 13% from a year ago.

The IDC definition of networked storage entails any system with a minimum of three disks, accompanied by controllers, cabling and host bus adapters. The disks can be contained inside a traditional storage array or installed in an x86 server chassis.

And as data center administrators will tell you, the trend line is gradually moving away from the purchase of big iron legacy storage that entails high costs and vendor lock-in.  IDC said cloud data centers selling consumption-based storage services fueled the biggest jump, buying $3.9 billion worth of storage gear from ODMs, or 46%. Overall, ODM sales to hyperscalers accounted for 27% of all enterprise storage investments – a percentage matched by server-side flash deployments, which climbed 10% to $3.8 billion.

No change atop the legacy storage leaderboard

Dell EMC maintained the No. 1 spot among the  array vendors. Dell captured 19% of the enterprise storage market, edging Hewlett Packard Enterprise (HPE) at 16%. For the quarter, the combined storage brands of Dell and EMC generated $2.6 billion, marking year-over-year growth of nearly 22%.

This year has been one of contrasts for Dell EMC. The vendor struggled early to shake off a string of successive down earnings in storage, before finally posting gains in June.  Last week, Dell EMC said it notched $3.9 billion en route to its third straight positive quarter, fueled in part by increased adoption of its VxRail hyper-converged infrastructure.

This week, parent company Dell unveiled a plan to go public in December with a complex buyback from shareholders of a tracking stock in its VMware subsidiary.  A return to public trading is not expected to have an impact on Dell EMC storage customers.

HPE held on to second-place, despite seeing revenues decline more than 3%. HPE’s $2.3 billion equates to 16.4% of global enterprise storage sales, yet that is down nearly 4 full percentage points from HPE’s 2017 results.  For the full year, HPE reported 13% growth in its legacy storage business, specifically calling out the integration of InfoSight analytics across its flagship 3PAR all-flash arrays as a key growth driver. HPE picked up InfoSight when it acquired Nimble Storage in 2017.

NetApp closed the quarter with revenue growth of 15% ($808.2 million), but its overall share of the legacy storage market remained flat at around 6%. After a period of transition for NetApp, during which it needed to quickly catch up to all-flash competitors, five consecutive quarter of 7% revenue growth have followed, including four quarters of profit.

Hitachi Vantara and IBM closed out the top five, each with roughly 3% of the enterprise storage systems market, although both vendors saw storage revenue drop by double digits. Hitachi Vantara, formerly known as Hitachi Data Systems, posted $428 million, down 10%.  IBM storage revenues fell 21% to $403 million.

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