Data Center Storage to Reach $103 Billion by 2028

New forecasts from Omdia predict that data center (DC) storage revenue will climb to $103 billion by 2028, reflecting robust growth and increased ASPs for storage.

The forecast includes DC external storage revenue from both arrays and server expansions.

The DC storage market in 2023 experienced a downturn, primarily due to economic challenges and decreased IT spending. The full year of storage revenue registered $53 billion, down 16% Y/Y.

The research from Omdia found that original design manufacturers (ODMs) revenue decreased by over 30% in 2023, as DC equipment spending temporarily shifted away from storage. In contrast, OEM vendors focusing on traditional storage demonstrated greater resilience, despite a small single digit Y/Y decline.

In 2023, cloud storage shipments faced constraints as cloud service providers allocated significant portions of their budgets to the purchase of costly GPUs. However, the storage market is poised for a resurgence driven by several key factors. The ongoing digital transformation, rapid growth in data volumes, advancements in AI, and the urgent need for storage modernization are all expected to fuel renewed growth. As industries become increasingly data-dependent, the storage market’s downturn is likely to be short-lived. These factors will collectively revitalize the storage market, ensuring a return to a growth trajectory.

Reviewing the movement within the storage market, Omdia principal analyst for Data Storage, Dennis Hahn, noted: “Despite a slowdown in growth during 2023, particularly in shipments to cloud service provider infrastructure, growth is expected to rebound throughout the forecast period.“

Omdia believes storage and data management are strategic components of modern digital enterprises, which will ensure continued long-term investments in storage.

“Storage vendors have been adjusting their acquisition models to be more cloud-like adopting a pay-per-use approach and focusing on overall data needs rather than just storage. Ransomware protection and AI-driven data set creation are becoming essential features in storage solutions.“

Omdia’s 2023 market review showed that ODM vendors maintained the lead with 32% revenue share followed by Dell EMC with 20% and Huawei in 3rd place with 7%. NetApp secured 4^th place with 5% while Lenovo rounded out the top 5 with a 4% market share.