The first quarter of 2018 was very, very good to the storage industry, according to IDC.
The market research firm, in a condensed version of its IDC Worldwide Quarterly Enterprise Storage Systems Tracker, estimated worldwide enterprise storage systems factory revenue in the quarter grew 34.4 percent over last year to reach US$13.01 billion, while worldwide external enterprise storage systems revenue grew 19.3 percent to reach US$6.26 billion.
As is normal, total storage capacity shipped rose, up 79.1 percent year-over-year to reach 98.8 exabytes in the first quarter.
Overall, the top storage vendors did well during the quarter, with Dell EMC showing renewed strong growth after a period of decline.
However, those vendors need to look over their shoulders. While upstart Pure Storage continues to catch up on the leaders, even more important is the huge growth being seen in the ODM direct storage business which saw its sales nearly double over last year.
For a look at how the different vendors and different segments of the storage market are doing, turn the page and look behind the numbers with CRN US.
IDC breaks its quarterly storage revenue numbers into two different markets.
The first is worldwide total enterprise storage system market, which includes enterprise storage sold both inside servers and storage sold as external storage subsystems. The second is worldwide external enterprise storage systems, which excludes storage that was deployed inside servers.
The distinction is important. Four of the top six storage vendors – Dell EMC, HPE, IBM, and Hitachi – sell both storage subsystems and servers, while two of them – NetApp and Pure Storage – do not have a server business.
That is why IDC has two sets of numbers for Dell EMC, HPE, Hitachi, and IBM, but only one set for NetApp.
As a category, sales of server-based storage increased 34.2 percent in the first quarter over last year to US$3.6 billion, or about 28 percent of the total enterprise storage market.
Flash storage helping drive storage growth
Both all-flash storage array and hybrid flash storage array sales outgrew the storage market by considerable margins. Hybrid flash storage arrays are arrays which contain a combination of flash and disk media.
IDC estimated all-flash array storage revenue in the first quarter of 2018 at US$2.1 billion, up 54.7 percent over the first quarter of 2017. That means all-flash storage sales accounts for about one-third of the entire worldwide external enterprise storage systems market.
Hybrid flash array sales in the first quarter of 2018 rose 23.8 percent over last year to reach US$2.5 billion, IDC estimated.
Dell EMC shows strong recovery
Dell EMC has been the No.1 provider of storage since Dell's acquisition of EMC, thereby continuing the longtime dominance that EMC previously held on its own. However, that leadership was threatened by a significant drop in sales over the last few quarters, opening the way for rivals Hewlett Packard Enterprise and NetApp to gain market share.
Indeed, Dell EMC showed a 14.6 percent drop in total enterprise storage systems and a 16 percent drop in external enterprise storage systems sales in the first quarter of 2017.
That slide in sales changed dramatically to a huge boost in share in the first quarter of 2018. IDC estimated Dell EMC total enterprise storage systems sales in the first quarter of 2018 rose 43 percent to US$2.82 billion, giving it the kind of market share – 21.6 percent – it enjoyed in years past. External enterprise storage systems sales for Dell EMC rose 44.6 percent over last year to reach US$2.01 billion.
Strong second place for HPE
Hewlett Packard Enterprise, like Dell EMC, continued to take advantage of its strong enterprise server business, and as a result retained its traditional position as the strong number-two seller of total enterprise storage sales.
HPE's first quarter 2018 total enterprise storage sales, which IDC said includes sales of HPE storage via China-based New H3C Group, reached US$2.31 billion, or 17.7 percent of the total market, IDC said. That was up 18.3 percent over the first quarter of 2017.
However, once one strips away enterprise storage as part of server sales, HPE is a rather distant third in the market, with sales of US$652.2 million, up 9.4 percent over last year.
The leader in server-based storage: HPE
Compare the server-based storage figures to server sales.
IDC in May estimated that Dell EMC sold US$3.59 billion worth of servers in the first quarter of 2018, up 50.6 percent year-over-year, while HPE sold US$3.51 billion worth of servers in the same period, up 22.6 percent over last year.
Combine the two, and one concludes that, for every US$1 in servers that leader Dell EMC sells, it sells only 21 cents worth of storage. For HPE, for every US$1 in servers sold, the company sells 47 US cents worth of storage, or over twice that of Dell EMC.
NetApp strong No.3, or No.2, depending on how it's measured
NetApp retained its No.3 position in first quarter 2018 total enterprise storage sales with revenue of US$890.1 million, giving the company a 6.8 percent market share. That was up 21.7 percent over first quarter 2017 sales, IDC estimated.
However, because NetApp does not have a server business, that US$890.1 million in revenue actually made it the No. 2 vendor of external enterprise storage systems sales. And that was good enough for a 14.2 percent market share.
Hitachi remains No.4 with small storage growth
Hitachi Vantara, which last year was formed from the combination of Hitachi Data Systems, Pentaho, and Hitachi's IT business, sold US$464.1 million worth of total enterprise storage systems in the first quarter of 2018, giving it a 3 percent market share. Sales were up 0.9 percent over last year.
In terms of external enterprise storage sales, Hitachi Vantara sold US$457.9 million of storage for a market share of 7.3 percent. Sales were up 2 percent over last year.
IBM stays at No.5, despite drop in sales
Of the top six vendors, only IBM showed a drop in first-quarter 2018 enterprise storage sales compared to last year.
IDC estimated IBM's total enterprise storage sales for the quarter to be US$387 million, which was down 16 percent over the same period last year. That revenue gave Big Blue a 3 percent market share.
In terms of external enterprise storage sales, the year-over-year fall was even higher, 17.3 percent, to US$364.2 million, which left IBM with a 5.8 percent market share.
Pure Storage soars at No 6 on all-flash storage
IDC, in its press statement about its first quarter enterprise storage sales, only called out the top five vendors by name. But with the surge that Pure Storage is seeing, CRN US is including that company here.
IDC, in a recent separate report on all-flash storage which was available to clients but an excerpt of which was seen by CRN US, reported Pure Storage had first-quarter 2018 revenue of US$236.4 million, up 45.2 percent over sales in the first quarter of 2017.
Since Pure Storage does not have a server business, that sales figure would be the same for the total enterprise storage and external enterprise storage, giving the vendor a strong sixth place in the storage business with a 1.8 percent share of the total enterprise storage systems market and a 3.8 percent share of the external enterprise storage market.
With that growth rate, however, Pure Storage could quickly outsell Hitachi Vantara and IBM to jump to the number 4 position. This is all the more significant given that Pure Storage sells only all-flash storage.
Here comes the 'others'
The fastest-growing part of the enterprise storage market is the one part where the brand-name vendors have very little say: ODM direct.
ODM direct enterprise storage includes capacity sold primarily to hyperscale cloud providers like Amazon Web Services, Google Cloud, Facebook, Twitter, and so on.
First quarter 2018 sales to this market reached US$3.11 billion, or 23.9 percent of the total enterprise storage systems market, by IDC estimates. That was up by a huge 80.4 percent over last year, a growth rate that over time could impact the storage sales of brand-name vendors.
IDC also estimated total enterprise storage sales by the "other" vendors at US$3.04 billion, or 23.9 percent of the market. That was up 26.9 percent over last year. On the external enterprise storage system sales side, the "other" vendors' revenue hit US$1.83 billion, or 29.3 percent of the market.
Note, however, that the "other" category includes Pure Storage's sales, which were not broken out by the IDC news release.