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18 Mar 2016

EMEA External Storage Market Continues to Decline in 4Q15 But All-Flash Adoption Soars, Says IDC

LONDON, March 18, 2016 — The total EMEA external storage systems value fell 7.5% year over year to $2.08 billion in the fourth quarter of 2015 (4Q15), according to IDC's EMEA Quarterly Disk Storage Systems Tracker, 4Q15. For the full year 2015, the external storage systems value in EMEA fell 8.5% to just over $7 billion, from $7.66 billion in 2014.

The traditional hard disk array (HDD) segment in the region continued its double-digit decline in 4Q15, falling 26.2% in user value to take the annual decline in the HDD segment in 2015 to 25.9% to $3.4 billion, from $4.6 billion in 2014.

The flash market, on the other hand, recorded huge growth, with the all-flash array (AFA) segment growing 151% annually in 4Q15. Hybrid flash arrays (HFAs) were almost flat in the quarter, with a 0.7% drop YoY. For the full year, AFA systems recorded strong triple-digit growth of 158%, while hybrid arrays grew by 5% YoY.

"Considering 2015 as a whole, unfavorable exchange rates had a major impact on performance in EMEA, with year-on-year trends determined by which currency rate was used — there was an 8.5% drop in value in dollars, for example, but a 9.2% increase in euros. But 2015 will mainly be remembered for being the tipping point in the datacenter transformation toward a more agile, cost-effective infrastructure, ready to support 3rd Platform applications and emerging workloads," said Silvia Cosso, senior analyst, European Storage Research, IDC. "The adoption of flash was remarkably quick during the year, with flash systems, both HFA and AFA, overtaking HDD-only systems and representing 51% of total value shipped in 2015 versus 40% in 2014. Cloud was also a strong driver of growth, especially in sales of commodity white boxes for public cloud applications, as seen by the 32% year-on-year growth of ODM and converged systems in the enterprise space."

Regional Highlights

Western Europe

The Western European external storage market fell 5% YoY in user value to $1.5 billion in 4Q15. For the full year, it fell 7.7% to $5.1 billion from $5.56 billion in 2014.

The flash storage segment remained the bright spot in Western Europe, with AFAs growing by almost 162% YoY and HFAs growing by 6.9% in user value for the full year. The all-flash segment grew 173.7% YoY, while the hybrid flash market was relatively flat with a 0.6% decline. The HDD segment, meanwhile, fell 25.2% in 4Q15.

"2015 was a turning point, with flash systems — both all-flash and hybrid flash — overtaking HDD-only systems to account for 52% of the total share of user value," said Archana Venkatraman, senior analyst, European Storage Research, IDC. "In 4Q15, AFAs accounted for over 15% of total shipments, compared with just over 5% in the same quarter last year. The stronger and faster adoption of AFA systems compared with HFAs indicates maturity in flash adoption in Western Europe, with enterprises looking beyond the initial high acquisition cost and making purchase decisions based on total cost of ownership and the enhanced performance and efficiency of business applications."

By country, the decline in the total external storage market in the U.K. and Germany continued in 4Q15, largely due to the drop in the HDD segment (15.3% in the U.K. and 23.7% in Germany), especially with some traditionally strong segments such as financial services slowing down investments in traditional storage infrastructures. On the other hand, France continued to defy this trend by recording another positive quarter in 4Q15, steadily returning to growth after a long run of negative quarters. This was propelled by strong growth in flash storage segments, with 258.7% growth in AFAs and 30% growth in HFAs.

"The accelerating transition toward the 3rd Platform is also influencing purchase decisions in strong European countries, with users shying away from high-end systems," said Venkatraman.

Central and Eastern Europe, the Middle East, and Africa

The last quarter of 2015 was marked by another poor performance in the Central and Eastern Europe, the Middle East, and Africa (CEMA) external storage market, reflected in a 13% year-on-year decline in user value to $586.6 million. The overall 2015 results fell below the $2 billion mark due to 10% lower spending than in the previous year. Capacity continued to see double-digit growth, reaching 941.1 petabytes and 2.9 exabytes for the quarter and the year respectively.

The subdued overall market results could be attributed to the gap between the new datacenter workload, cost, and efficiency requirements and the prevailing legacy storage systems, coupled with the disruption caused by vendors' ongoing efforts to transform their strategies. The flash subsegment thrived, however, with AFAs more than doubling their value between 2014 and 2015 as vendors entered different price band segments and focused their efforts on penetration in the Middle East and Africa (MEA). Together, AFAs and HFAs in CEMA fell just short of 50% of the market for the year.

"Looking at the results, 2015 was one of the worst years for the storage hardware market in CEMA in the past four years, as it again failed to reach the levels of 2012," said Marina Kostova, senior research analyst, Storage Systems, IDC CEMA. "Macroeconomic factors, political turbulence, the embargo in Russia, and falling oil prices were largely responsible for this, but they will only have a transitory effect. While IDC expects the market to return to more positive performance, the disruption caused by 3rd Platform technologies is changing the storage consumption and competitive landscape for good, highlighting the limitations of the traditional storage market and creating new opportunities for emerging trends and players."



Top 5 Vendors, EMEA External Disk Storage Systems Value ($M)

Vendor

4Q14

4Q14

Market Shares

4Q15

4Q15

Market Shares

4Q15

YoY Growth

EMC

$641.5

28.4%

$590.0

28.3%

-8.0%

IBM

$380.9

16.9%

$304.4

14.6%

-20.1%

HPE

$300.9

13.3%

$300.3

14.4%

-0.2%

NetApp

$278.9

12.4%

$251.9

12.1%

-9.7%

Hitachi

$171.8

7.6%

$165.6

7.9%

-3.6%

Others

$483.7

21.4%

$475.9

22.8%

-1.6%

Grand total

$2,257.7

100.0%

$2,088.2

100.0%

-7.5%

Top 5 Vendors, EMEA External Disk Storage Systems (Value Market Share), 4Q15: http://chartchannel.ich a rts.net/chartchannel/top-5-vendors-emea-external-disk-storage-systems-value-market-share-4q15_mh7xzcpnc

About IDC

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For more information, contact:

Archana Venkatraman

+44 20 8987 7100

avenkatraman@idc.com

Coverage
Contact
For more information, contact:

Archana Venkatraman
avenkatraman@idc.com
44 20 8987 7100