The computer storage hardware market is growing at a compound annual growth rate of about 20.3% worldwide, even though it has reached a state of maturity
Storage hardware is still the lifeline of the business world. Crucial data needs to be stored permanently. That is why billions are spent annually on storage media by companies of all scales and sizes.
As the demand for newer data storage devices and hardware grows, the storage hardware market, too, continues to expand. The top five trends in the segment are as follows:
1. Shift Back to DAS and SDS
DAS (Direct-Attached Storage) and SDS (Software-Defined Storage) were the first kinds of storage hardware devices. Those were the initial years when the data got stored in a storage device when directly connected to the computer. These storage types, however, had issues related to the duplicity of data and trapped capacities.
Then came the era of SAN and NAS, which facilitated shared storage. These were heralded for their efficiency. SAN stands for storage area networks, where the typical storage area network examples are Fiber channels, Ethernet, etc.
NAS is the short form for network-attached storage. These network storage devices were shared by multiple PCs and servers simultaneously. As a result, SAN network storage and NAS storage are way faster than local storage devices.
As per the latest trends, though, there has been a rekindling of interest in DAS and SDS even though network area storage and SAN storage types are comparatively more competent storage architectures. So what is the reason behind this?
Derek Dicker, CEO at Nyriad, has the answer. He feels that the prices of shared network storage drives hit the ceiling with unnecessary in-built features and proprietary stacks. As a result, companies returned to DAS and SDS, even though using these devices was more complicated than storage area network products. It was mainly because the former devices were low-priced vis-a-vis network area storage devices.
Analyzing the prices and the features of NAS and SAN area network devices does prove that these hardware items could have been more generous, which eventually had a repelling action. The trend was most visible with companies dominating the cloud services industry and vying for other business verticals, in other words, the hyperscalers. These companies went all out to oppose the shared cloud storage solutions which more prominent OEMs offered.
2. Monopolistic Trend Observed in Storage Hardware Market
Steven Santamaria, CEO at Folio Photonics, believes that the counter moves against NAS and SAN solutions is the multi-vendor consolidation drive undertaken by the bigwigs in the industry. As a result, many startups and small entities became targets of supplier consolidation strategies.
Consequently, as of date, there are only six leading players globally – three in the hard disk drive (HDD) and solid-state drive (SSD) market and three in tape hardware. They provide top-heavy storage solutions for about 80% of the total archival data in the world.
To top it off, due to IT vendor consolidation, most of the solutions are from outside the US. Therefore, the industry has a big vacuum with the growing risk of a monopolistic vertical market. While there are multiple vendor consolidation benefits, the data archival hardware industry urgently requires new vendors and novel solutions.
3. Ecosystem Advancements Support Shared Storage
Dicker says that the hyperscalers have rewritten the infrastructural gamut of shared storage resources by disaggregating compute processors and memory. They have broken the very DAS framework that they had coded.
Most large data centers now understand that the storage can be pooled with computing and storage that will help them make their centers more efficient. As novel ideas and solutions make their way into the ecosystem that supports affordable and efficient shared resources, significant changes are expected in this industry.
As per Dicker, these new systems will propel the growth of open ecosystems taking care of problematic issues like data protection. In addition, they will have certain management features that will drive efficiency and affordability.
Hyperscalers are the biggest purchasers of storage devices and solutions, to the tune of almost 60% of the total products manufactured. This has led to customer consolidation, another reason for worry in the industry.
Since these biggies have purchasing power, they can flex their way when designing features related to cloud data storage, IT architecture, and other services related to their network-attached storage Not only are the features innovative, but they are also affordably priced.
Consequently, other cloud service providers find it challenging to offer competitively-priced solutions. Santamaria says that due to their purchasing power, hyperscalers coerce storage hardware vendors to provide lower prices, thus putting innovative and next-gen products in peril, with manufacturers unable to command reasonable prices and revenue margins. It has further isolated the hardware storage industry with fewer interested investors.
Many client-side companies cannot afford hyperscalers due to compliance matters, and on-premise storage from non-hyperscalers is a tug-of-war with fewer manufacturers
Compared to a few years back, when the cost of storage hardware was the critical parameter during buying decision-making, it is now the total cost of ownership. The cost of acquisition, says Santamaria, is no longer as essential as the cost of power consumption, which has a sustainability angle to it.
The focus is to reduce TCO. As per TCO analysis and projections, by 2025, data centers will use about 3% of the energy generated globally. Since storage solutions use about 30% of power in data centers which are approximately 1% of the global power generated, it is time to work around the TCO model, given that the actual usage in the future can be way more than the projections.
Thus, the way forward is that the hardware storage industry needs to work on solutions that use power optimally.
Mother Nature doesn’t want your old computers but we do.