Why the datacenter storage market is expected to rapidly grow to $103 billion by 2028?
Published on September 4, 2024, at 8:00 AM
Omdia announced a forecast for the datacenter storage market on August 15, 2024 (UK time). According to the announcement, the revenue of datacenter storage reflects strong growth and an increase in the average selling price of storage, reaching $103 billion by 2028. This forecast includes revenue from both storage arrays and server extensions for external datacenter storage. The company provided the following explanation for the announced forecast and research.
Omdia announced a forecast for the datacenter storage market on August 15, 2024 (UK time). According to the announcement, the revenue of datacenter storage reflects strong growth and an increase in the average selling price of storage, reaching $103 billion by 2028. This forecast includes revenue from both storage arrays and server extensions for external datacenter storage. The company provided the following explanation for the announced forecast and research.
What are the factors behind the decline in 2023 and the subsequent expansion of sales?
The data center storage market in 2023 was sluggish due to economic challenges and a decrease in IT spending. Annual storage revenue recorded $53 billion, a 16% decrease compared to the previous year.
Due to a temporary shift in hardware spending by data center operators from storage, ODM (Original Design Manufacturing) sales in 2023 decreased by more than 30%. In contrast, OEM vendors focusing on traditional storage have relatively maintained their performance with a single-digit decrease compared to the previous year.
In 2023, cloud service providers allocated a significant portion of their budget to the purchase of expensive GPUs (Graphics Processing Units), which limited the shipment of cloud storage. However, the storage market is preparing for a revival due to several important factors. Omdia predicts that digital transformation (DX), the rapid increase in data volume, advances in artificial intelligence (AI), and the modernization of storage will be driving forces for resurgence.
"As industries increasingly rely on data, the slump in the storage market is likely to end in a short period of time. By synergistically activating the storage market with various factors, it will ensure a return to a growth trajectory." (Omdia)
The data center storage market in 2023 was sluggish due to economic challenges and a decrease in IT spending. Annual storage revenue recorded $53 billion, a 16% decrease compared to the previous year.
Due to a temporary shift in hardware spending by data center operators from storage, ODM (Original Design Manufacturing) sales in 2023 decreased by more than 30%. In contrast, OEM vendors focusing on traditional storage have relatively maintained their performance with a single-digit decrease compared to the previous year.
In 2023, cloud service providers allocated a significant portion of their budget to the purchase of expensive GPUs (Graphics Processing Units), which limited the shipment of cloud storage. However, the storage market is preparing for a revival due to several important factors. Omdia predicts that digital transformation (DX), the rapid increase in data volume, advances in artificial intelligence (AI), and the modernization of storage will be driving forces for resurgence.
"As industries increasingly rely on data, the slump in the storage market is likely to end in a short period of time. By synergistically activating the storage market with various factors, it will ensure a return to a growth trajectory." (Omdia)
Dennis Hahn, Senior Analyst for Data Storage at Omdia, reflected on the movement in the storage market as follows: "In 2023, although growth in shipments for infrastructure by cloud service providers slows down, we expect growth to recover throughout the forecast period."
Omdia states, "Storage and data management are strategic elements for modern digital enterprises, and we believe that long-term investment in storage will continue."
"Storage vendors are transitioning to a more cloud-like procurement model by adopting a pay-as-you-go approach and focusing on the overall needs of the data, not just storage. In addition, ransomware protection and the utilization of AI for data set creation are becoming essential functionalities for storage solutions." (Hahn)
In the 2023 market review by Omdia, the ODM vendor maintained the top position with a 32% revenue share, followed by Dell EMC at 20%, and Huawei at 7% in third place. NetApp secured fourth place with 5%, and Lenovo made it to the top 5 with a 4% market share.
Omdia states, "Storage and data management are strategic elements for modern digital enterprises, and we believe that long-term investment in storage will continue."
"Storage vendors are transitioning to a more cloud-like procurement model by adopting a pay-as-you-go approach and focusing on the overall needs of the data, not just storage. In addition, ransomware protection and the utilization of AI for data set creation are becoming essential functionalities for storage solutions." (Hahn)
In the 2023 market review by Omdia, the ODM vendor maintained the top position with a 32% revenue share, followed by Dell EMC at 20%, and Huawei at 7% in third place. NetApp secured fourth place with 5%, and Lenovo made it to the top 5 with a 4% market share.
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