back to article Go and whistle, IDC. The storage world's going to hell in a handbasket

Data volumes are growing like crazy and yet there's a case to be made that 2016 is going to be a tough old year for storage, and could be an annus horribilis* and not an IDC prediction-fuelled glory year. Really? Yes, really. Try this argument on for size. South America is in a dreadful economic state. Brazil is over-spent …

  1. Dan Wilkie

    Not my field, but I would wager that if you've listened to Donald Trump at all, you've probably listened to him too much...

  2. markkulacz

    Its all about the cloud

    Most industrial data storage growth is being provided by hyperscalars. There is falling to flat revenue for traditional on-prem IT, 40% YoY growth for cloud/SaaS.

    Its not that the world need less storage. Storage is just purchased differently.

  3. RegGuy1 Silver badge

    Annus horribilis is Latin for miserable year but sounds gleefully like horrible ass. I like that.

    Whereas anus horribilis is Latin for horrible ass. And I like that.

  4. Androgynous Cow Herd

    It's all about the cloud??

    If you go into the cloud, really go into it, and wave your arms around and blow all the cloudiness away, you will find yourself staring a lot of spinning Rust and blinky lights.

    It's still storage, the only thing that changed is the billing model. It doesn't solve everything or even most things, and it's not a new concept

    1. EvilPixieMan

      Re: It's all about the cloud??

      No, the type of storage used is also different. Maybe still rusty spinners or SSD, but not put together with kit from the Enterprise storage vendors. Same-same-but-different.

  5. Anonymous Coward

    Storage hardware and software is being commoditized....

    First, you have the traditional transition where the value being created by storage is coming mostly from software and services, and less from the actual hardware. This is in line with what happened with PCs/servers/computing/networking, just now it is hitting storage

    Second, you have the rise of various cloud storage options. As a group they are pricing aggressively to gain/keep share, and their presence is pushing a lot of storage hardware purchases to these players, so they can buy in volume and aggressively pit the traditional storage powerhouses against eachother.

    Third, you have the increase in global network bandwidth, so users can better access cloud and remote storage services, so there is less need for on-prem.

  6. allthecoolshortnamesweretaken

    Chris, interesting read! I have a hunch that for a lot of companies #6 (activist investors) will be the toughest problem. But if you need a hug, it's gonna cost you airfare.

    1. hoola Silver badge

      Ahh, The Active Investor

      Where would we be without these "Active Investors"? These are the cause of so many problems, asset stripping, board manipulation dodgy dealing and tax avoidance. Yet, the authorities and shareholders are powerless to do anything about them.

  7. gnufrontier

    Your analysis sounds plausible. I am still waiting however for the light bulb to go on and illuminate the fact that most of what is being stored is completely irrelevant will never be accessed again and never needed to be stored in the first place or if it did can be deleted in short order.

    If it is in the past it is totally irrelevant except for where the law states one has to keep certain data for x number of years.

    Big data can barely handle what is presently coming through the pipe let alone going back in to the past and sucking up more sludge.

    There is a mass disorder in the IT world: data hoarding.

  8. yo_G

    legacy storage vendors

    I'm reminded of Public Enemy sampling the Godfather: THEY'RE ANIMALS ANYWAY, SO LET THEM LOOSE THEIR SOULS

  9. Anonymous Coward
    Anonymous Coward

    SSD's and Server SANs

    This year and next will continue the downturn for legacy external storage sales. The rise of SSD capacity and drop in price/GB in those SSDs is going to change the storage landscape (even more) during this time. Goodbye external, hello server-SAN. BUT....just like tapes, spinning isn't going away....neither is external arrays; there will always be a project common to many businesses where that 10Gb iSCSI connection to big fat 7.2K drives will be of value.

    If this is true, then all those "small" storage players (Nimble, Pure, Tegile, Tintri, etc) will need to sell their firmware/OS or come up with a SuperMicro-based offering (for example) to remain relevant to the market....they NEED compute!

    Back to the article....the way you position the world, only the USA companies can buy anything! I guess the rest of the the world is rotting away to nothing and therefore, storage sales will suffer. Hmmm....I'd say even if this were even remotely similar to what's really going on, STORAGE sales are not high on the list of worries...we can always delete data to free up space if it becomes really bad. Hackers do it all the time and the victims seem to survive. HA!

  10. Anonymous Coward
    Anonymous Coward

    Storage = Commdity

    Compute has been heavily commoditised with on x86 architecture, all major cloud providers only offer compute on x86.

    Yet most enterprise IT shops are still buying very expensive, high profit margin storage products? Why? All major cloud providers already build their own storage from is really not that hard as hardware has been commoditised and open source Linux provides all required components.

    Just like compute moved from proprietary architectures to commodity low cost x86 and the legacy UNIX vendors moved from expensive AIX/HP-UX/Solaris to commodity open source too storage will move to commodity x86 hardware (check out Storage Bay Bridge) with open source Linux.

    Legacy Storage Vendors = Dead man walking.

    IT Vendors Gross Profit Margin:

    Vendor,Revenue (Billion),Gross Profit (Billion),Gross Profit Margin (%)

    IBM 90.15,46.4,51.47%

    HP 108.28,26.62,24.58%

    Cisco 48.68,27.77,57.05%

    Dell 56.94,12.19,21.40%

    EMC 24.57,15.25,62.07%

    VMware 6.19,5.12,82.71%

    NetApp 6.12,3.83,62.58%

    Oracle 38.23,31.04,81.19%

    Microsoft 94.74,59.9,63.23%

    SuperMicro 1.85,0.22554,12.19% (commodity margin!!)

    Foxconn 97.12,15.26,15.71% (commodity margin!!)

    1. Alan Brown Silver badge

      Re: Storage = Commdity

      "Yet most enterprise IT shops are still buying very expensive, high profit margin storage products?"

      The main reason people buy the high-cost stuff comes down to support. If you build it yourself then you get to carry the can when it breaks. If it's bought in then the vendor can take a kicking when it breaks (in my experience, that's not "if")

      There are cheaper options around - such as TrueNAS, which is one of the cheapest fully-supported ZFS builds out there and unlike OpenE or Nexenta they actually put their name on the front of the box, so you only need to deal with one point when things go funny vs having Hardware and Software suppliers pointing fingers at each other.(*)

      (*) About a decade ago we had a vendor-supplied solution fail under load. HP vs Suse vs Steeleye all blamed each other - then Suse simply shut down all discussion and ran away, refusing to even respond to Novell head office. Not a brilliant response after outlaying £180k on kit and paying £9k/year for software support and a good reason to never _ever_ use them again.

  11. Anonymous Coward
    Anonymous Coward

    I like prediction No. 1

    > 1. Dell, EMC, HP, IBM, Fujitsu, and NetApp legacy arrays will see revenue falls as customers choose cheaper and better alternatives.

    Since I work for a company that makes cheaper and better alternative.

  12. Mainframer

    Say what?

    If your only tool is a hammer, then the world looks like a nail. By that I mean that your analysis appears plausible, but how is the argument confined to the storage industry? If true, a lot more than just the storage industry will be in the bind...

  13. nobody_important

    Not so fast...

    Yes, those no-value tin shifters will bite the dust - that much is true.

    Whilst cloud-wavers are vying to gain market share, they're going to fall foul of the "trying to suck an elephan through a straw" argument...but I can see a gap for any enterprising object storage people to provide in-house capabilty, thereby allowing data storage at "much-cheapness" prices but at the same time allowing orgs to devolve the responsibility, management overhead and risk to another party.

    Consulting lark you say? Not quite, even a 10 man team would have their hands full manning a 24.7 desk just for a handful of customers. If those bigger enterprises wake up and smell the coffee, they will realise that they already have the crown jewels sitting in their lap (so to speak).

    They have the 24.7 capability and the logistics "heft" to manage JBODs/firmware & scale to leverage price discounts - all they need to do is brave the technology gap and provide an object storage package that is quick & easy to deploy.

    I'll count myself as ignorant and say that Object storage seems to be remarkably complicated to deploy... but what happened if you owned all the h/w items/drivers in the h/w stack...?

  14. FDavids

    "Cheaper and Better Alternatives"

    In regards to 1. Dell, EMC, HP, IBM, Fujitsu, and NetApp legacy arrays will see revenue falls as customers choose cheaper and better alternatives.

    Disclosure, I work for one of these “legacy” vendors. Opinion is mine, not that of my company. One important fact that seems to get overlooked when talking about these “cheaper and better alternatives” is company viability. These “cheaper alternatives” in many cases are cheaper because those companies are selling at a loss to gain share. What good is a cheaper and presumably better alternative if the company you purchase it from goes out of business six months after you buy their product. Nimble is one example. 18 months ago, they were worth $4.5B on paper, today they are worth 10% of that. I am not saying Nimble will go out of business, but they have a hard financial road ahead of them. Violin already received their stock delisting warning from NYSE and many other “cheaper and better” startups are close to going under. Pure = Not profitable, Nutanix = not profitable, Nimble = Not profitable, Violin = not profitable and the list goes on and on. Most of these companies are not profitable and have no way to become so unless they raise prices or someone buys them. Few of them will get bought and most of them will lose their value proposition if they raise prices. So say what you will about the legacy vendors. They may be losing share, but are still profitable unlike practically all of the “cheaper and better”.

  15. T283ta

    It is not "Cheaper and Better". Its just cheaper.

    For most new generation "IT gurus" its simple: Cheaper=Better. I never seen "alternatives" which are "better" from feature/functions/SLAs perspective comparing to mentioned brands.

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