All Flash Arrays Cross the 50% Revenue Threshold as Component Price Inflation and AI Storage Attach Reshape the Market.
| $9.2B Total Revenue 1Q26 | +22.7% YoY Revenue Growth | $4.9B All Flash Array Revenue | +60.7% High End Segment Growth |
BOSTON, Mass., June 15, 2026 – The worldwide external OEM enterprise storage systems (ESS) market delivered a sharp acceleration in the first quarter of 2026, reaching $9.2 billion in vendor revenue, a 22.7% year-over-year increase, according to IDC’s Worldwide Quarterly Enterprise Storage Systems Tracker. The result represents an important acceleration from the 3.9% full-year 2025 growth rate and the 5.5% expansion recorded in the fourth quarter of 2025, reflecting the convergence of deferred infrastructure refresh spending, component price inflation, and AI-driven storage demand.
The enterprise storage market, which spent much of the prior two years in the shadow of explosive server and GPU investment, is now benefiting from two reinforcing tailwinds: enterprises refreshing storage infrastructure that was deferred while AI server spending took priority, and a new wave of AI-driven storage demand emerging from training pipelines, inferencing workloads, and unstructured data activation use cases. Component supply constraints, particularly for NAND flash and DRAM, continue to push system-level prices upward, further amplifying revenue growth beyond what shipment volumes alone would suggest.
Key findings from IDC’s Worldwide Quarterly Enterprise Storage Systems Tracker, 1Q26
- +22.7% year-over-year growth in vendor revenue in 1Q26, reaching $9.2 billion, compared to $7.5 billion in 1Q25.
- All Flash Arrays (AFA) crossed the 50% revenue threshold for the first time, generating $4.9 billion (+32.7% YoY) and representing 52.6% of total ESS revenue. Hybrid Flash Arrays (HFA) grew 14.0% YoY to $3.5 billion (37.8% share), while All HDD arrays grew 10.2% to $0.9 billion (9.6% share).
- High End systems (systems priced above $250K ASP) surged 60.7% YoY to $2.4 billion, now representing 25.5% of the market, driven by large-scale AI infrastructure storage deployments. Midrange systems ($25K–$250K) grew 17.3% to $5.9 billion (64.4% share), while Entry systems (<$25K) declined 6.1% to $0.9 billion.
- The market leader recorded the largest single-quarter share expansion among major vendors, gaining more than 4 percentage points of revenue share year over year to reach 31.2%.
- The full-year 2025 external ESS market reached $33.0 billion (+3.9% YoY). The sharp 1Q26 acceleration signals a fundamental shift in market trajectory as AI infrastructure storage demand becomes a primary growth engine.
- Top three fastest-growing regions: Central & Eastern Europe (+41.7%), Canada (+25.4%), and PRC (+20.7%), alongside strong performance from the dominant US market (+30.4%, $3.95B, 42.8% share).
What Is Driving Enterprise Storage Growth in 2026?
Two structural forces are amplifying revenue growth beyond underlying unit demand, according to IDC’s analysis of the 1Q26 ESS market.
First, component inflation: SSD, HDD, and DRAM prices all rising on a quarter-over-quarter basis, pushing system-level average selling prices upward. IDC expects this pricing pressure to persist through 2027, before new fabrication capacity brings meaningful supply relief.
Second, a multi-year deferred refresh cycle is now flowing through. Enterprises that prioritized server and AI infrastructure spending in 2024–2025 at the expense of storage refreshes are now addressing aging infrastructure, particularly in High End segments where the refresh economics are most acute. IDC’s tracker data shows High End storage (systems priced above $250K) surging 60.7% year over year in 1Q26, the sharpest segment acceleration in the market.
This combination is expected to sustain above-historical-average growth rates through the remainder of 2026, even as volume growth remains constrained by supply availability, per IDC’s forward projections.
What Is the State of AI-Driven Storage Demand?
Storage is increasingly framed as a critical bottleneck in enterprise AI deployment, a view supported by vendor earnings disclosures and IDC channel data from 1Q26. Multiple leading storage vendors reported record or near-record revenue in recent quarters, with demand tied directly to AI workload requirements. All-flash platforms targeting GPU-to-storage bandwidth requirements in AI training and inferencing environments are among the fastest-growing product categories tracked by IDC. Subscription and as-a-service storage models are also gaining traction, as enterprises seek consumption-aligned procurement for AI infrastructure buildouts.
“The first quarter of 2026 marks a turning point for the enterprise storage market. After two years of being eclipsed by server and AI compute spending, storage is returning to double-digit growth performance,” said Juan Seminara, research director, Worldwide Enterprise Infrastructure Trackers, IDC. “The convergence of a long-deferred refresh cycle, rising component prices, and AI-driven storage demand, from training to inferencing and unstructured data activation, is producing a growth environment we have not seen in this market for several years. The structural shift toward All Flash Arrays crossing the 50% revenue threshold reflects a clear transition in how enterprises architect their data infrastructure for the AI era ahead.”
External Storage Regional Market Results
Regional performance in 1Q26 was broadly positive, with eight of nine tracked regions posting year-over-year revenue growth. The United States remained the dominant market, generating $3.95 billion (+30.4% YoY) and representing 42.8% of global ESS revenue, underpinned by hyperscaler AI storage buildout and a broad-based enterprise refresh cycle. Central & Eastern Europe (CEE) was the fastest-growing region at +41.7% YoY ($231.0M), reflecting accelerating government and enterprise infrastructure investment. Canada grew +25.4% YoY ($218.2M), while PRC posted +20.7% YoY ($1.42B), supported by continued domestic AI infrastructure investment despite ongoing geopolitical headwinds. APeJC and Western Europe grew at comparable rates of +19.1% ($701.6M) and +18.9% ($1.75B) respectively, with Western Europe partly driven by Sovereign AI program investments across the continent. Latin America (+10.6%) and Middle East & Africa (+5.0%) contributed more modestly, while Japan was essentially flat (-0.2% YoY, $319.6M), normalizing against a strong prior-year base.
Overall External Storage Market Standings, by Company
Dell Technologies claimed the top position by a wider margin in 1Q26, with 31.2% revenue share and 40.8% YoY growth, reflecting success across its broad portfolio and its AI storage attach strategy. NetApp retained second place with 9.9% share and 9.6% YoY growth, underpinned by its growing all-flash business and cloud-integrated data management. Everpure moved into third position with 8.9% share and 37.9% growth, driven by subscription model adoption and AI-optimized platforms. Huawei held fourth position with 6.7% share and 15.4% growth. Hewlett Packard Enterprise rounded out the top five with 5.4% share and 2.9% growth.
Top 5 Companies Worldwide External Enterprise Storage Systems Market, 1Q26 (Vendor Revenue in US$ millions)
| Company | 1Q26 Revenue | 1Q26 Share | 1Q25 Revenue | 1Q25 Share | YoY Growth |
| 1. Dell Technologies | $2,876.4M | 31.2% | $2,042.4M | 27.1% | +40.8% |
| 2. NetApp | $911.2M | 9.9% | $831.1M | 11.0% | +9.6% |
| 3. Everpure | $824.8M | 8.9% | $598.3M | 7.9% | +37.9% |
| 4. Huawei | $615.6M | 6.7% | $533.6M | 7.1% | +15.4% |
| 5. Hewlett Packard Enterprise | $496.1M | 5.4% | $482.0M | 6.4% | +2.9% |
| Rest of Market | $3,507.2M | 38.0% | $3,036.8M | 40.4% | +15.5% |
| Total | $9,231.4M | 100.0% | $7,524.3M | 100.0% | +22.7% |
Source: IDC Worldwide Quarterly Enterprise Storage Systems Tracker, June 11, 2026
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