A sharp drop in sales of high-end storage arrays dragged down the entire storage market in revenue terms during the first quarter despite a huge jump in total capacity sold, according to the latest IDC Worldwide Quarterly Disk Storage Systems Tracker.
That translated to bad news for the major storage vendors, all of whom saw their storage sales take big hits in the quarter.
Analyst firm IDC Friday said worldwide revenue for the total disk storage business, which includes storage capacity sold both external to servers and inside the servers, suffered a year-over-year 6.9-percent drop to $7.3 billion in te first quarter of 2014.
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When looking at only external disk storage system sales, revenue for the first quarter was $5.6 billion, down 5.2 percent over the same period as last year.
However, during that same time, the total amount of disk storage capacity sold rose 19.9 percent to 9.9 exabytes, IDC reported.
[Related: 1Q Storage: Dell Sales Boom, HP Sales Bust]
The decline in first quarter sales from one year ago was primarily driven by a 25-percent decline in high-end storage spending, wrote Eric Sheppard, research director for IDC storage, in a statement in the IDC report.
"Other important contributors to the market decline include the mainstream adoption of storage optimization technologies, a general trend towards keeping systems longer, economic uncertainty, and the ability of customers to address capacity needs on a micro and short-term basis through public cloud offerings," Sheppard wrote.
This doesn't mean the storage industry is in trouble, said Rich Baldwin, CIO and chief strategy officer of Nth Generation Computing, a San Diego-based solution provider.
"It means prices keep coming down," Baldwin said. "We're seeing storage growth in our business. We're quoting customers in the one-half-petabyte to one-petabyte range, with an equivalent DR (disaster recovery) site."
For Nth, which counts Hewlett-Packard as its primary storage vendor, sales revenue from storage now matches that of HP ProLiant servers, a far cry from a couple years ago when the ProLiant servers were the bulk of Nth's business, Baldwin said.
"I'm not worried," he said. "There's a combination of performance storage, backup storage, and archiving storage going into customers who are moving away from tape to disk-based backup. People don't want to rely on tape. They need fast recovery."
Customers continue to invest in storage, and can get robust solutions with incredible performance and capacity in the $100,000 range, Baldwin said.
"They're buying a lot of storage," he said. "They want to get enough capacity so they don't need to go back to the well so quickly. I'm bullish."
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