Cloud services are now influencing data storage vendor sales!

Cloud service providers are changing the world of enterprise storage, as sales of manufactures who sell directly to big cloud companies like Google and Facebook has increased, while the market for traditional external storage systems is shrinking. This was revealed in a survey conducted by International Data Corporation (IDC).

It is a known fact that web services providers typically do not use specialized storage platforms in their sprawling data centers. They instead purchase hardware, which meets its needs specifically and then control that hardware with the help of software.

As per the latest global IDC report on enterprise storage systems, revenue for original design manufactures that sell directly to hyperscale data center operators grew by 25.8% to more than $1 billion in second quarter this year. On an overall note, the industry revenue grew to just 2.1 % from last year’s second quarter, reaching $8.8 billion.

The other astonishing find in this survey is that most of the low profile vendors, who sold their hardware to web service providers this year, where based in Taiwan. Example Quanta computer and Wistron, which are very little known companies in international markets. IDC revealed that the sales teams of said companies’ are focusing more on hyperscale data centers, rather than general enterprises and so are sailing in credible profit zone.

The survey also revealed that traditional external systems like SAN are still the biggest part of the enterprise storage business, logging $5.7 billion in revenue, for the quarter. However, sales in this segment were down by 3.9% were down. IDC claimed that the reason for sales down-growth is due to the fact that start-up companies are offering equipment at low cost than the traditional vendors and that too with a profound warranty and after sales service.

The cloud and virtualization trends didn’t reshuffle the main players in the second quarter but may have influenced some of their results. EMC remained the biggest vendor by revenue with just over 19 percent of the market, followed by Hewlett-Packard with just over 16 percent. EMC, which sells newer technologies like solid-state and software-defined storage but is also deeply invested in traditional platforms, dropped 4 percent in revenue, IDC said.

IDC also revealed that the craze for all-flash storage systems and Hybrid storage has increased by 37% in this year, when compared to last year.

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