16 Dec 2020

EMEA External Enterprise Storage Market on a Slow Path to Recovery in 3Q20 with Reduced Market Decline, but Uncertainties Still Inhibit Full Recovery, says IDC

LONDON, December 16, 2020 — The EMEA external storage systems market was down 5.4% year-on-year in dollars and 10% in euros in 2020Q3, according to International Data Corporation's (IDC) EMEA Quarterly Disk Storage Systems Tracker.

Once again, the quarter saw marked differences across subregions, with Western Europe down 8.3% year-on-year and CEMA up 2.3% (both in dollars).

On a brighter note, the all-flash-array (AFA) segment remained resilient at a positive 7.9% year-on-year, bringing its share of external storage market value to 44.7%, up from 39.2% in the same quarter a year ago. This increase was at the expense of both hybrid flash arrays (HFAs) and HDD-only arrays, both down by about 14% year-on-year.

"Softness in investments and budget freezes are still common across EMEA and above all in Europe," said Silvia Cosso, associate research director, Storage Systems, IDC Western Europe. "However, the need to adapt to the new normal is bringing about an appetite for transformative investments in modernizing datacenters. The multicloud paradigm, increased interest in as-a-service consumption models, and the need to move IT infrastructure close to the end user is expected to push investments once economic activity resumes normal levels."

Western Europe

Western European external storage market value was down 8.3% in dollars (-12.7% in euros), remaining in negative territory for the sixth quarter in a row. All-flash arrays, however, proved buoyant, jumping to 45.5% of total value from 40.5% a year ago, recording a 3% increase year-on-year.

Overall, it seems that the worst is over for Western Europe, which went from double-digit declines in the past two quarters to a high single-digit decline. The outlook for 4Q20 remains cautious due to the new restrictions in force just before the festive period.

"Signs of recovery and appetites for investment are coming from businesses and the public sector alike across the region, propelled by the need to accelerate digital transformation projects, which are expected to drive a rebound in the market over the course of the next year. However, the short- term double threat of Brexit and further economic shocks from the pandemic could still hinder demand," said Cosso.

Central and Eastern Europe, the Middle East, and Africa

Market growth in Central and Eastern Europe, and particularly the performance of the HCI and PBBA segments (at 20% of the total), managed to sustain the small growth in CEMA in the third quarter of 2020. YoY value for the region increased 2.3% to reach $525.8 million.

While large projects were put on hold in CEE, the midrange benefited from the relaxation of pandemic measures in the summer and was the main driver behind growth. MEA saw increased storage spending by the government, military, healthcare, and managed service providers, but this was unable to compensate for the general slowdown of market activity.

All-flash systems continued to grow at double-digit rates (22.5%), convincingly dominating the market with 43% of total value.

"2020 proved to be more optimistic than expected for the storage market, which could be explained by a combination of delayed impact on business of the imposed COVID-related measures and their subsequent removal in most countries during the summer," said Marina Kostova, research manager, Storage Systems, IDC CEMA. "The second wave will mostly likely shift the more substantial market recovery to the second half of 2021. End users surveyed by IDC confirm this, but the magnitude of recovery could vary depending on the severity of new outbreaks of the new virus, the speed of mass vaccination, and government flexibility in supporting businesses."

IDC's Worldwide Quarterly Disk Storage Systems Tracker enhances clients' ability to respond quickly and effectively to today's dynamic storage market. Understanding which global markets and segments are growing and knowing the quarterly adoption curve for new products have become business-critical needs for disk storage vendors, supply chain partners, and the Wall Street financial community.