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It's hard to imagine a more tumultuous year in the enterprise storage market than 2015, when Dell bought storage...
giant EMC for $67 billion, and flash, cloud and hyper-convergence threatened all legacy technologies. But plenty of change and disruption is also in the 2016 forecast, according to storage executives and analysts.
Predictions for the enterprise storage market include a further shakeout among vendors, the slow demise of traditional data storage arrays and the ultimate decline of high-performance hard disk drives (HDDs), while the newer options gain greater acceptance.
"With all the [mergers and acquisitions] going on and the slowdown in IT spending, you're going to see a whole bunch of people asking a lot of questions about whether data storage is dead and a lot of redefinition of what the business of data storage really is," said Laz Vekiarides, CTO and co-founder of ClearSky Data, a VC-funded startup that aims to help enterprises shift more data to public cloud storage.
Below is a sampling of predictions, spanning general categories in the enterprise storage market.
Enterprise storage market shakeout
Hu Yoshida, CTO at Hitachi Data Systems: There's going to be a shakeout among the vendors in the storage market, because the traditional HDD market is declining. The roadmap has come to a stop. Kryder's Law is dead. Neither the technology nor the volumes are there to drive down the HDD cost. The volumes are being taken by flash drives. Cloud is also having an impact. [Amazon Web Services] does not buy storage from the infrastructure vendors. They go to ODMs, and they have their own disks made for them. Analysts say that for every dollar that goes into AWS infrastructure, it displaces $3 to $4 of infrastructure spend. Companies that are purely in the infrastructure business will suffer. And all the startup all-flash array companies are going to have a difficult time, because they're going to have to go to the next generation of flash. That's going to involve retooling and money that has to be invested. I think they are very vulnerable.
Enterprise storage market spending
Mark Peters, senior analyst at Enterprise Strategy Group Inc.: 2016 is the year when everyone -- vendors, users and commentators alike -- will be publicly talking about the degree of genuine and dramatic change that is nascent in the storage ecosystem. I mean a realization that the end of the external storage array industry, as we have known it for decades, is coming to a close. Yes, it will take years more to happen, but even the realization and public discourse will hasten its eventual demise. Our industry is going the way of the horse and carriage or fax machines. They were good for a while, and it's not that we don't need to move people or documents around. It's simply that we have found better and more efficient ways of doing things. Software-definition, in its broadest sense, is to traditional storage approaches what Uber is to traditional taxi companies.
David Floyer, CTO and co-founder at Wikibon: 2016 will be the first time that more than 50% of enterprise storage spending will be on low-latency storage [flash]. The major reason is the success of flash in the data center and, more specifically, in the success of all-flash approaches to applications. The benefits are not limited to application performance. By sharing many logical copies of data on the same physical copy of flash, the amount of flash required is dramatically reduced by a factor of up to 20 times, and the cycle time of access to data is dramatically improved from weeks to minutes. Disk storage will continue to dominate capacity storage until the early 2020s, after which disk will decline rapidly.
Marc Staimer, president at Dragon Slayer Consulting: You're going to see much faster growth in server-side storage than you see in standalone storage systems, whether software-defined, hyper-converged or ultra-converged. Overall standalone storage system sales will grow at a measly pace when it comes to revenue, but from a capacity point of view, they will grow reasonably well. But the biggest growth will be in storage in servers, because we have the technology today to enable that storage to be shared among multiple servers and there's a difference in cost. The average cost per terabyte on the server side is one-third of the most discounted price on the storage system side. Even if you have to have more copies of your data, it's still less cost-wise.
You're also going to see application-specific storage grow faster than infrastructure-specific storage. Storage that's optimized for VMware or Docker is infrastructure software-specific. But if it's optimized for Oracle databases, MySQL, SQL Server, MongoDB or structured and unstructured applications, that's different. I've optimized my storage to work hand in hand with the application more efficiently.
Kieran Harty, CTO at Tintri: There will be blood in the storage market, as 2016 is marked by consolidation and storage startups exiting the market. The Dell-EMC acquisition is merely the starting point. Other large, established storage companies will most certainly feel the pressure this year, leading them to either make acquisitions or go private. Next-gen storage vendors with less than a few hundred million in funding won't be able to scale fast enough to survive. This shakeout started in 2015. It's going to get messier in 2016.
Cloud will have even greater impact
Floyer, Wikibon: We're going to see true private cloud start to take off in 2016. Vendors are now in a position to create true private clouds, which will provide similar benefits as public cloud -- such as one throat to choke, software-defined, converged or hyper-converged infrastructure, self-service, automation and orchestration. That is going to be the start of a complete revolution of operations in the data center. Integration and maintenance will move from the responsibility of the data center to the responsibility of the vendor. This is the beginning of the end of the traditional data center silos of storage, network and servers.
John Roese, senior vice president and CTO at EMC: Next year, a new, mature approach to cloud will emerge, where IT will use a portfolio of cloud services with offerings optimized for each of the application workload types. For example, the cloud service used to support your SAP workload is different than the cloud service you will use to run your new customer-loyalty mobile application. To date, IT has largely been searching for a single cloud service to meet all its needs. This has always been an oversimplification of the technology.
Dave Wright, vice president and general manager of NetApp SolidFire: Every vendor is going to suddenly pivot to some kind of cloud-centric messaging and strategy. They are going to be introducing and repositioning virtually all of their product lines around cloud in some way, shape or form. That may be positioning products to sell to public cloud providers, repositioning what were appliances as software-only solutions that run on a public cloud, or creating service arms and service offerings that are focused on providing value on top of public cloud services. The guys that aren't successful in replacing their legacy revenue streams with cloud revenue streams are going to be out of business.
Stu Miniman, senior analyst at Wikibon: While the storage industry is very much aware of the threats of cloud computing, 2016 will witness an acceleration of how software as a service and infrastructure as a service cut into the available market for enterprise storage vendors. In 2015, AWS delivered over $2 billion of storage services, led by [Simple Storage Service], and Microsoft made a push to have customers move to Office 365. SaaS and IaaS will continue to accelerate at high double-digit growth rates. Although the enterprise storage market has pockets of growth -- including hyper-convergence, scale-out NAS and all-flash arrays -- it is offset by a rapid decline in older architectures. It will be difficult for 2016 to have more dramatic changes than 2015, including Dell buying EMC, Pure Storage's [initial public offering] and HP splitting. But market share for enterprise storage vendors at the end of 2016 will see the most shifts in recent history.
Software-defined storage takes off
Andy Walls, CTO and Chief Architect for Flash Systems at IBM: This year, we're going to see software-defined storage take off, as the demand starts to meet the supply. I talk to clients all the time who say they have smaller staffs. But the amount of data and the pressure on businesses to make sense out of that data is growing rapidly. We see the need for something to allow clients to meet their demands in an affordable way. At the same time, the software-defined products have become more mature.
Mark Lewis, chairman and CEO at Formation Data Systems: This year, in general, becomes a turning point, where we really start to see the strategic elements of infrastructure modernization and the use of software-defined technologies take hold in the enterprise. The essential element is that it has to be software that runs on top of industry-standard hardware from multiple vendors. No. 2 is its construct is API-connected and service-oriented. It could be a management service, an automation service, a storage service [or] a backup service. But it's not a protocol. It's not a long, functional spec.
Itzik Reich, CTO at EMC XtremIO: Customers kicked the tires with containers and OpenStack in 2014 and 2015. But 2016 is going to be the big year for those technologies, and companies that sell flash products need to suit their feature sets to support applications that use containers and OpenStack. Common belief is that the public cloud is better suited to these technologies, but flash storage, properly applied, tilts the balance back in favor of on-premises infrastructure in many cases.
Internet of Things needs storage
Jerome Lecat, CEO at Scality: The big thing for storage in 2016 is going to be big data in the form of deep learning and Internet of Things. So far, IoT projects have not been gobbling that much storage. In 2016, we're going to see much more storage taken by IoT coupled with big data. Enterprises will be buying software for storage significantly more. The consolidation of the object storage industry that happened in 2015 will spark more demand in 2016, because it's much easier for customers to understand what they can get from the technology. It used to be that you had lots of vendors, each claiming different things. Now, you have a few vendors, and it's becoming very clear what you can get.
Tony Bishop, vice president of global vertical strategy and marketing at Equinix: Mobility combined with the record-breaking adoption and expansion of IoT devices and sensors will continue to accelerate in 2016, resulting in a flood of data that not only strains network capacity, but also brings with it questions and concerns around data sovereignty. We predict multicloud, distributed IT strategies will be a huge part of the enterprise push in 2016 toward achieving business agility, enhancing the ability to use IoT to quickly adapt to changing conditions in a secure way. Additionally, with multicloud storage strategies, enterprises will be able to manage their data sprawl -- all while achieving cost reductions and increased performance.
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