IDC EMEA External Disk Storage Systems 2Q11 trends

Europe is the worst hit region in this present economic crisis. We have seen countries such as Greece, Portugal and Ireland being some of the worst hit countries and Italy was just downgraded last week by S&P. Last week was also the release of the 2Q2011 External Disk Storage Systems figures from IDC and the poor economic sentiments are reflected in the IDC figures as well.

Overall, the factory revenue for Western Europe grew 6% compared to the year before, but declined 5% when compared to 1Q2011. As I was reading a summary of the report, 2 very interesting trends were clear.

• The high-end market of above USD250,000 AND the lower-end market of less than USD50,000 increased while the mid-end market of between USD50,000-100,000 price range declined
• Sentiments revealed that storage buyers are increasingly looking for platforms that are quick to deploy and easy to manage.

As older systems are refreshed, larger companies are definitely consolidating into larger, higher-end systems to support the consolidation of their businesses and operations. Fundamentals such as storage consolidation, centralized data protection, disaster recovery and server virtualization are likely to be the key initiatives by larger organization to cut operational costs and maximizing of storage economics. This has translated to the EMEA market spending more on the higher-end storage solutions from EMC, IBM, HDS and HP.

NetApp, which has been always very strong in the mid-end market, did well to increase their market share and factory revenue at IBM’s and HP’s expense because their sales were flattish. Dell, while transitioning from its partnership with EMC to its Dell Compellent boxes, was the worst hit.

The lower-end storage solution market, according to IDC figures, increased between 10-25% depending on the price ranges of USD5,000 to USD10,000 to USD15,000. This could mean a few things but the obvious call would be the economic situation of most Western European SMBs/SMEs. This could also mean that the mid-end market could be on the decline as many of the lower-end systems are good enough to do the job. One thing the economic crisis can teach us is to be very prudent with our spendings and I believe the Western European companies are taking the same path to control their costs and maximizing their investments.

The second trend was more interesting to me. The quote of “quick to deploy and easy to manage” is definitely pushing the market to react to more off-the-shelf and open components. From an HP stand point of their Converged Infrastructure, the x86 strategy for their storage solutions is making good sense, because I believe there will be lesser need for proprietary hardware from traditional storage vendors like EMC, NetApp and others (HP included). Likewise, having storage solutions such as VSA (Virtual Storage Appliance) and storage appliance software that runs on the x86 platforms such as Nexenta and Gluster could spell out the next wave in the storage networking industry. To have things easy, specialized appliances which I have spoke much of lately, hits the requirement of “quick to deploy and easy to manage” right on the dot.

The overall fundamentals of the external disk storage systems market remain strong. Below is the present standings in the EMEA market as reported by IDC.