Declining Data Storage Market Hurts EMC, Dell, and IBM
The market for data storage hardware continues to plummet.
Sales of data storage hardware declined 2.2% year-over-year to $10.4 billion in the fourth quarter, International Data Corporation said in research released on Friday.
Business technology giant EMC (EMC) still leads when it comes to selling storage, but it saw its sales of storage systems fall 5.2% to $2.2 billion for the fourth quarter.
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Hewlett Packard Enterprise (HPE) bucked the trend of declining sales, however, with a gain of 7.9% to $1.6 billion. One possible reason for the sales increase could be due to the company’s new flash-based storage products, which CEO Meg Whitman recently bragged had improved sales during the company’s latest earnings report.
The IDC report shows that although more old-school storage systems are declining, like those based on spinning discs, the market for flash-based storage is on the rise. IDC analysts explained that sales of all-flash storage systems grew 72% year over year in the fourth quarter to $955.4 million.
Still, the rise of cloud computing in which companies can rent storage and computing services from giants like Microsoft (MSFT) and Amazon (AMZN) posed a risk to traditional storage vendors, the report explained.
Additionally, when companies are looking to buy storage hardware, they seem to purchase products that bundle storage capabilities into servers. Some examples of companies selling these type of hybrid storage and server systems include fast rising startups Nutanix and Simplivity.
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Barclays also released a report on Friday in response to the IDC research, and reiterated its take on the decline of the overall storage market. The Barclays analysts, like IDC, agree that cloud computing continues to eat into sales by storage vendors.
“Previously, we have referred to storage market dynamics as swimming with sharks in a shrinking fish bowl,” the Barclays report said. “This view does not change after the most recent earnings season and latest IDC numbers.”