Server Transitions Give Internal Storage Arrays Sales A Breather

March 26, 2012 Timothy Prickett Morgan

In last week’s issue of The Four Hundred, I walked you through the latest statistics from Gartner regarding sales of external disk arrays. Gartner’s public information only covers outboard storage arrays, not the internal disk arrays that are still common among SMB customers. IDC‘s public data covers total storage array sales as well as external array sales, which means we can calculate what’s happening with internal arrays.

Let’s start with the broadest data and drill down from there. IDC reckons that in the fourth quarter, across all array types and no matter where they are located–under a server’s skin or a few racks down in the data center–worldwide disk storage system sales were $8.5 billion, up 3.5 percent year-on year. The total capacity consumed in the fourth quarter was 6,279 petabytes, an increase of 22.4 percent. If you do the math on that, then you will see that the average cost of a terabyte of disk array storage cost $1,609 across all machines and types in the fourth quarter of 2010, and it fell by 15.4 percent to $1,361 a year later. The capacity increases were despite the flooding in Thailand last year, which caused shortages for disk drives (mostly those used in PCs) and components used in disk drives (servos, motors, arms, and such gizmos).

In the fourth quarter, EMC totally maintained its lead in the sale of external storage arrays (and I have to break myself from the habit of saying “disk arrays” since a lot of storage arrays have flash-based drives in them and tiered storage software as well). Here’s how the vendors stacked up:

I took apart the tables that IDC put together for the fourth quarter and did the math so we can see what happened with internal storage array sales. Here’s how the math works out:

	Q4 2010	Q4 2011		Q4 2010	Q4 2011		Q4 2010	Q4 2011
	External	External	Change	Internal	Internal	Change	Total	Total	Change
EMC	$1,575	$1,927	22.3%	$0	$0	–	$1,575	$1,927	22.3%
IBM	$995	$996	0.1%	$533	$407	-23.6%	$1,528	$1,403	-8.2%
NetApp	$630	$734	16.5%	$0	$0	–	$630	$734	16.5%
HP	$703	$677	-3.7%	$883	$837	-5.2%	$1,586	$1,514	-4.5%
Others	$2,182	$2,222	1.8%	$751	$745	-0.8%	$2,933	$2,967	1.2%
Total	$6,085	$6,556	7.7%	$2,167	$1,989	-8.2%	$8,252	$8,545	3.6%

External disk array sales grew by 7.7 percent in the quarter, to $6.56 billion, while internal disk array sales were off 8.2 percent to just under $2 billion, as you can see from the above table. So internal arrays are out of vogue, right? Not so fast. You have to remember that both Intel and Advanced Micro Devices were in the middle of X86 processor transitions during the fourth quarter, so you would expect sales of arrays tied directly to machines to fall. I am not sure what is happening with IBM’s internal array sales, but they clearly took a hit, and it is my guess that IBM is emphasizing its Storwize external arrays among midrange and enterprise shops that might have otherwise gone with internal arrays.

Whatever the deal is with internal arrays, if you look at the data for the full year, both external and internal arrays showed growth, thus:

	2010	2011		2010	2011		2010	2011
	External	External	Change	Internal	Internal	Change	Total	Total	Change
EMC	$5,416	$6,694	23.6%	$0	$0	–	$5,416	$6,694	23.6%
IBM	$2,922	$3,183	8.9%	$1,668	$1,604	-3.8%	$4,590	$4,787	4.3%
NetApp	$2,352	$2,911	23.8%	$0	$0	–	$2,352	$2,911	23.8%
HP	$2,344	$2,524	7.7%	$3,108	$3,234	4.1%	$5,452	$5,758	5.6%
Others	$8,202	$8,183	-0.2%	$2,706	$2,746	1.5%	$10,908	$10,929	0.2%
Total	$21,236	$23,495	10.6%	$7,482	$7,584	1.4%	$28,718	$31,079	8.2%

Obviously, the growth in external array sales for the year was much larger than for internal arrays for the full 2011 year. But if you do a little more math, as I did, you’ll see that if you just take the first three quarters of the year, when server sales were only starting to slow toward the end of those nine months, then internal array revenues were up 5.3 percent to $5.6 billion. That’s still less than the $16.9 billion in sales for external arrays during the same time, to be sure, and that is also a lot less than the 11.8 percent growth, too.

But heed this: fashions in server and storage packaging change quickly, and for many distributed computing workloads, having storage inside the node is absolutely essential. And RAID disk controllers are not because data replication (usually in triplicates at the very least for both performance and high availability reasons) is built into the systems software layer. I am not sure where these “just-a-bunch-of-disk” or JBOD arrays appear in the IDC numbers, but what I can tell you is that there is a very fast growing portion of the system and storage business that is moving to large numbers of minimalist server and storage arrays with funky file systems and databases (in all honesty, they are data stores, not even databases in the traditional sense).

Anyway, in the fourth quarter, IDC says that network-attached storage (NAS) sales were off 1.2 percent compared to the prior year’s period, and that EMC had a 48.8 percent share of this space, with NetApp getting 29.4 percent of this sub-pie. iSCSI SAN sales were up 16.6 percent in the quarter, and Dell was the market leader here with 30.0 percent share; EMC had 20.4 percent and Hewlett-Packard had 12.8 percent. What IDC calls the “open SAN” market grew by 14.1 percent in the fourth quarter, with EMC having 26.7 percent share, followed by IBM with 18 percent and HP with 12.7 percent. If you add together NAS, Open SAN, and iSCSI SAN, the total market came to $5.6 billion, up 9.6 percent.