EMEA External Storage Market Crashes 6 Percent

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IDC quarterly tracker pins EMEA losses on turbulent politics and currency swings, but high-growth cloud and flash ODMs stay afloat

The external disk storage market in Europe, the Middle East and Africa (EMEA) took a dive in the first quarter of 2015, plunging six percent year over year according to research firm IDC.

The cause? “Heavy currency swings and uncertain political conditions” said IDC analyst Silvia Cosso. Just like IDC’s cloud infrastructure quarterly report last week, it seems the current happenings in Eastern Europe are having a knock-on effect on the cloud and storage markets.

Total capacity grew 16 percent year on year to 2.9 exabytes, with a slowdown in $/GB due to the increasing adoption of flash-powered systems, reckons IDC.

However, looking at the impact of the euro on the storage market presents a completely different view of the market, with growth of almost 15 percent year on year and a value of €1.5 billion (£1m).

Cloud and flash

But Cosso said that the only new, high-growth segments, like cloud and flash, were spared by the drop in investments.

“For example, the ODM (original design manufacturer) segment, with its 112 percent year-on-year growth, has spiked to almost 6 percent of the total EMEA hardware storage market in the quarter, up from 3 percent in 1Q14. As a result, the companies focused around one of these high-growth segments have managed to keep afloat as opposed to big, more generalist ones,” he said.

EMC came out as the top vendor in the first quarter of 2015, increasing its market share year over year from 25.4 percent to 26.2 percent. NetApp and HP followed up with 16.1 percent and 13.1 percent relatively, with IBM and Dell in fourth and fifth position. However, all five of these top vendors reported lower sales than the previous year.

Western Europe fared particularly better in the first quarter than Africa and the Middle East.

“Rapid growth in data volumes is pushing Western European organisations to optimise their storage infrastructures by adding newer storage technologies such as flash arrays into the mix,” said Archana Venkatraman, senior analyst at IDC. “The increased acceptability of all-flash arrays, thanks to compelling use cases around sub-millisecond latency and high performances, has kept the technology immune to the slump seen in the other segments of the storage market.”

The number of flash deals is increasing every quarter and adoption of flash will further accelerate in Western Europe as economies of scale come into the picture, IDC believes.

“A continued decline in high-end systems, longer IT purchase cycles, and the gradual move to cloud storage for non-critical data were also key contributors for the storage market decline this quarter,” said Venkatraman.

Meanwhile, the Central and Eastern Europe, Middle East, and Africa (CEMA) external storage market declined 2.2 percent over 1Q14, accounting for $424.8 million (£273m) in user value, but significantly increased in terms of capacity, up 42.8 percent to 566.3 petabytes.

“Capacity in the region surged mostly due to the Middle East and Africa [MEA] region seeing intense investments by government and enterprise segments in high-end and flash-enhanced storage solutions,” said Marina Kostova, storage systems analyst, IDC CEMA.

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