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Research Review | Enterprise Storage Systems Market Growth

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Submitted by Kevin Jacoby on
Blog Category: Storage

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Worldwide Enterprise External OEM Storage Systems Market Spending Expected to Grow 3.4% over a 5-year period, According to IDC
In the second quarter of 2023, the external enterprise storage systems (ESS) market was expectedly weak, with vendor revenue (including traditional sales and sales of storage hardware for as-a-service consumption) declining 4.7% year-over-year. IDC expects that this is the first quarter in the wave of market weaknesses, which is driven by the overall market slowdown, the aftermath of a strong wave of spending in 2022, and the redirection of spending/efforts on catching up with the AI/GenAI movement.
In 2022. The external ESS market experienced higher than usual growth, which, besides regular drivers, was fueled by economy-centric factors such as increasing prices and interest rates and the looming risk of recession, as well as extra shipments of back-ordered systems. Now, the industry is moving into the period of “hard compares” when, in the absence of the new equally strong short-term factors, the regular demand for storage systems results in disadvantageous comparisons with an abnormally strong performance in previous periods.
An interesting nuance to this development, however, is that it coincides with high interest in exploring, introducing, and integrating more AI-centric workloads, which, while they can be strategic in nature, haven’t yet become mission-critical for day-to-day operations. At the same time, AI is one of the workloads which is both performance- and data-intensive. With the current hype around AI, we expect some boost in demand for server and storage products, which will keep the infrastructure markets in a relatively good shape compared to some other IT segments. However, for storage systems, the booming impact of AI, and especially Generative AI (GenAI) is delayed as the compute element of the AI infrastructure is a priority.
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