Worldwide external controller-based (ECB) disk storage vendor revenue from external cloud computing deployments is forecast to grow from $267,4-million in 2010 to $1,45-billion in 2015, according to Gartner. The market is on pace to total $417,3-million in 2011, a 56% increase from 2010.
Gartner uses the term “external cloud” to mean any public, private or hybrid cloud that is offered by a third-party provider that services multiple customers, as a contrast to those deployed within individual organisations’ internal data centres, which serve only internal clients.
“As external cloud computing emerges as a new segment of the storage market, competition is increasing with leading commercial ECB disk storage vendors developing or acquiring technologies that will serve as a good fit for external cloud deployments,” says Sid Deshpande, senior research analyst at Gartner.
ECB disk storage deployed in the external cloud today forms a very small portion of the overall market for ECB storage. Gartner estimates that external cloud deployment constituted only 1,4% of overall ECB disk storage vendor revenue in 2010. However, this segment will grow much faster than the overall market because many external cloud services are still at the early build-out stage.
Although both small or midsized businesses (SMBs) and large organisations are utilising software as a service (SaaS) today, the primary consumers of infrastructure as a service (IaaS) will continue to be smaller organisations. The external private cloud infrastructure market is still in a nascent stage, with hosting providers largely looking to leverage their existing large-enterprise customer base for early customer wins.
On the demand side, in the last 18 months external cloud services have gained increased popularity and traction, with several new providers emerging and ramping up their cloud service offerings. Gartner’s research reveals that most ECB storage revenue generated from external cloud deployment in 2010 and the first half of 2011 came from SaaS and IaaS deployments, and analysts said that the SaaS and IaaS provider segments will continue to constitute the bulk of opportunities for ECB disk storage sales through 2015.
“We believe the SaaS providers offer the largest cloud opportunity for ECB disk storage vendors in the short term, as many software service vendors lack a hardware portfolio and may lack the resources to develop their own infrastructure hardware,” says Pushan Rinnen, research director at Gartner. “However, SaaS-based vendor revenue will grow much slower than the combined growth rate of cloud application infrastructure and cloud system infrastructure through 2015. Therefore, we believe IaaS will represent a larger long-term opportunity for commercial disk array vendors.”
Gartner analysts said the vast majority of cloud opportunities for ECB disk storage vendors lie with SaaS and comprehensive IaaS providers, which offer storage and servers/applications together and require the high availability, reliability and performance of some commercial disk storage arrays. With the exception of a few extremely large cloud providers, such as Google, Amazon and Facebook, which have deep pockets for internal R&D to develop their own storage infrastructure with commodity hardware, enterprise-focused external cloud providers will prefer commercial ECB storage technologies over homegrown storage hardware infrastructures.
“Recognising the inadequacy of older storage architectures to serve public cloud workloads and meet price-to-performance ratios for large-scale deployments, storage system vendors have started focusing on acquiring or developing cloud-optimised storage arrays that provide increased scalability and performance at lower price points,” says Deshpande. “While this focus on organic and inorganic technology innovation by storage vendors holds strong promise for external cloud service providers, price points for these cloud-optimised storage arrays will have to decline significantly if they are to find traction among the largest cloud infrastructure deployments.”