Data centre (DC) storage revenue – including external storage from both arrays and server expansions – will climb to $103-billion by 2028, according to new research from Omdia.
The DC storage market in 2023 experienced a downturn, primarily due to economic challenges and decreased IT spending, with revenue of $53-billion – down 16% YoY.
The new research from Omdia found that original design manufacturers (ODMs) revenue decreased by over 30% in 2023 as DC equipment spending temporarily shifted away from storage. In contrast, OEM vendors focusing on traditional storage demonstrated greater resilience, despite a small single digit YoY decline.
In 2023, cloud storage shipments faced constraints as cloud service providers allocated significant portions of their budgets to the purchase of costly GPUs. However, the storage market is poised for a resurgence driven by several key factors.
The ongoing digital transformation, rapid growth in data volumes, advancements in AI, and the urgent need for storage modernisation are all expected to fuel renewed growth. As industries become increasingly data-dependent, the storage market’s downturn is likely to be short-lived. These factors will collectively revitalise the storage market and ensure a return to a growth trajectory.
“Despite a slowdown in growth during 2023, particularly in shipments to cloud service provider infrastructure, growth is expected to rebound throughout the forecast period,” says Dennis Hahn, principal analyst for Data Storage at Omdia.
Omdia believes storage and data management are strategic components of modern digital enterprises which will ensure continued long-term investments in storage.
“Storage vendors have been adjusting their acquisition models to be more cloud-like adopting a pay-per-use approach and focusing on overall data needs rather than just storage,” says Hahn. “Ransomware protection and AI-driven data set creation are becoming essential features in storage solutions.”
Omdia’s 2023 market review showed that ODM vendors maintained the lead with 32% revenue share followed by Dell EMC with 20% and Huawei in third place with 7%. NetApp secured fourth place with 5%, while Lenovo rounded out the top five with a 4% market share.