Sluggish 1Q14 for EMEA External Disk Systems – IDC

The external disk storage systems market value in Europe, the Middle East, and Africa (EMEA) was down 1.4% year over year in terms of user value, according to the EMEA Quarterly Disk Storage Systems Tracker from International Data Corporation.

The dollar per gigabyte declined about 30% year on year, increasing shipped storage capacity by over 40% to a value just shy of 2.5EB.

Western Europe
Western Europe declined 1% year on year, interrupting the positive trend built up in the last three quarters.

“Western Europe’s sluggish performance is down to deferred customer orders in view of model renewals, as well as still weak economies across the region,” said Silvia Cosso, storage systems analyst, IDC Western Europe. “From a price band perspective, the high-end class dropped heavily for the fourth quarter in a row, as customers are shifting to the midrange. This trend is also aggravated by seasonality factors, with large accounts pushing back investments later in the year.”

From a country perspective, traditionally strong economies such as France and most of the Nordics were on the negative side, while trends in crisis-battered economies such as the Iberian Peninsula, Greece, and Ireland remained volatile – a sign that the recovery could still be some way off. Overall, with France progressively losing ground since the second quarter of 2013, the Western European market is increasingly dependent on Germany and the U.K., both of which recorded single-digit growth.

CEMA
The external storage market in Central and Eastern Europe, the Middle East, and Africa (CEMA) dropped slightly, with 2.4% annual growth, while capacity jumped 30%. The two subregions demonstrated similar behavior.

The Central and Eastern European (CEE) region was pulled down by weak performance in most of the countries.

“Ukraine, Kazakhstan, and some other CIS countries witnessed significant cutbacks in storage spending by both public and private sectors due to the Ukrainian-Russian situation and dependence on the unstable Russian economy,” said Marina Kostova, systems storage analyst, IDC CEMA. “The Russian storage market itself grew modestly to reflect the shorter investment cycle in 1Q and changes in tender legislation.“

Middle East and African (MEA) countries suffered the most from the sharp drop in high-end storage system shipments, which contracted more than 50% since last year. Mobile telecommunication companies and large retailers reconsidered their investment strategy, focusing on converged infrastructure and server consolidation at the expense of storage hardware. The midrange systems segment demonstrated double-digit growth, but was unable to affect overall external storage market performance in the region.

Vendor Highlights
Overall, the quarter registered a mixed performance across the top-ranked vendors.

• EMC still tops the list as the largest DSS vendor in EMEA, accounting for over a quarter of total sales in the region, though with a decline in Y/Y shipments, mainly due to weak Symmetrix orders.
• NetApp, in second position, put in a positive performance thanks to a strong quarter in CEMA; by capitalizing on execution of storage projects in CEE delayed from last quarter, it was able to lift its revenue share in EMEA to more than 17%.
• HP was also positive, thanks to a strong quarter in Western Europe and MEA, though the comparison is affected by a weak first quarter in 2013, with the 3PAR family gaining momentum across all the subregions. HP’s strategy in MEA to invest in presales and channel coverage started to deliver results.
• IBM‘s mixed performance across the subregions resulted in an overall weak quarter. The vendor was relatively strong in Western Europe, where its Storwize family, currently accounting for 35% of its sales, helped compensate for weak demand for DS8000. Company and channel restructuring issues, however, resulted in a double-digit decline in CEMA and this dragged IBM’s overall performance down.
• Hitachi was pulled down by a struggling VSP – victim of a general drop in the high-end market – and not even the strong performance of HUS in the midrange tier was able to make up for the losses.
• Dell also was on a negative path for the quarter, with weak orders for its PowerVault MD and Compellent families.

 
EMEA External Disk Storage Systems Value
(in $ million)

(Source: IDC EMEA Quarterly Disk Storage Systems Tracker, 2014)

EMEA External Storage Vendor Market Share, 1Q13/1Q14 Revenue

(Source: IDC EMEA Quarterly Disk Storage Systems Tracker, 2014)

Taxonomy Notes:

• IDC defines a disk storage system as a set of storage elements, including controllers, cables, and (in some instances) HBAs, associated with three or more disks. A system may be located outside of or within a server cabinet and the average cost of the disk storage systems does not include infrastructure storage hardware (i.e., switches) and non-bundled storage software.
• The information in this quantitative study is based on a branded view of disk storage systems sales. Revenue associated with the products to the end user is attributed to the seller (brand) of the product, not the manufacturer. OEM sales are not included in this study.