10 Storage Predictions For 2018
Storage In 2018: Deja Vu Again
The year 2018 for the storage industry is shaping up to be a year that looks more like an extension of 2017 than a sea change. Many trends – increased cloud adoption, the shift from disk to flash storage, the move towards software-defined everything – continue to shape the storage and data center infrastructure.
Though the trends are familiar, 2018 won't be boring. Vendors large and small, as well as their channel partners, have to make decisions that could impact their very existence. The continuing shift in the old guard of storage and the lack of knowledge in the U.S. about the massive coming impact from GDPR means 2018 will turn out to be an exciting time after all.
How exciting? Turn the page and go with CRN on a look at the 10 top trends facing the storage industry.
Public Vs. Private Cloud Debate Finally Silenced
Why, oh, why do people still debate the benefits of public versus private clouds? Businesses want the security of private clouds and the flexibility of public clouds. Combining the two in a hybrid cloud, where data can move to wherever it is most useful, is where the business is going.
Storage vendors, with their vested interest in helping businesses build private clouds have taken steps to make it easier to move data between their offerings and public clouds. They've been slow because of the potential risk that too much data will move to public clouds and negate their business models. But it will be tougher yet if they cannot make the transition and let others take the initiative. In 2018, look for full-throated acceptance of hybrid storage clouds.
M&A Activity Will Be Strong
2018 will continue to see more mergers and acquisitions in the storage industry. However, it will not be centered so much on large acquisitions as HPE did in 2017 when it purchased both SimpliVity and Nimble Storage. There are fewer good large acquisition targets and even fewer companies that could successfully swallow a storage vendor, even though Western Digital in 2017 did manage an acquisition of flash storage vendor Tegile.
Instead, expect to see smaller mergers and acquisitions as larger storage vendors look to either tack on new point technologies or find ways to make up for a shortage of skilled talent. There's certainly no lack of potential targets. It seems there are at least as many new companies getting funded as existing companies are getting acquired or closing their doors.
Dell EMC Will Find Its Way
The historic 2016 merger of Dell and EMC and the subsequent integration went as smoothly as any merger of two completely different corporate cultures could. One lingering after-effect was several quarters of falling storage sales as the two worked to unite multiple and somewhat overlapping product lines and completely different channel and sales organizations.
The tide seems to have turned, however, with the third quarter of 2017 showing Dell EMC with a slight rise in storage revenue according to IDC. The company has unified its sales and channel programs and rationalized its product lines, and is poised for a Renaissance in 2018. Given the headwinds the storage industry faces as businesses increasingly embrace the cloud and software-defined whatever, Dell EMC may not see the kind of market share leadership it had in the past. But it will make sure everyone knows who is king of the storage hill.
NetApp Will Reach The Edge Of Greatness
NetApp, once the storage industry underdog, was by far the fastest-growing major storage vendor of 2017 and is now within striking distance of industry leader Dell EMC. That was thanks to a long transition from legacy storage to what has become one of the industry's most cloud-friendly storage line.
NetApp will continue its strong growth in 2018. It won't take the top spot from Dell EMC yet. But there are a couple of caveats. First, while NetApp has ensured that its on-premises storage offerings offer easy back and forth cloud migrations, others are also quickly moving in this direction. NetApp enjoyed the fastest growth in all-flash storage in 2017, but 2018 will see a push by everyone in this part of the market. And NetApp, like all storage hardware vendors, will see pressure from software-defined storage.
SSDs Will Ready The Final Assault On Data Center Storage
2017 saw a huge shortage of flash memory, the key ingredient of SSDs, large part as manufacturers switched to new flash technology like NVMe. That, in turn, constrained SSD supply and caused prices to rise.
Well, the shortage will soon be history. IDC in December said it expected SSD unit shipments to increase by a compound annual growth rate of 15.1 percent between 2016 and 2021, with revenue slated to hit $33.6 billion by 2021.
Flash storage price on a per-gigabyte basis may never fall to the point where it is cheaper than disk-based storage, but the fact that the shortage is about over, and SSD prices will go back to the traditional falling price curve, means that business will specify all-flash storage for all new purchases of anything above the secondary or archive storage level.
Software-Defined Storage Will Be Front And Center
Dave Hitz, NetApp co-founder and executive vice president, in an October meeting with CRN, finally broke the unspoken taboo among large storage vendors against saying they could do away with their hardware and go software-defined. By saying a company like NetApp could be more successful as a software company without hardware, Hitz joined the chorus of smaller vendors clamoring to get that message out.
2018 will see the storage industry embrace software-defined storage in a big way. All storage, whether from small or large vendors, are really software-defined, even if the vendors don't admit it, and they are ready to start putting down the screw drivers and sheet metal benders. And customers are no longer wedded to particular hardware. So watch for the industry to make its big software-defined play this year.
Hyper-Converged Infrastructure Will Continue To Gain In '18, But Not Sure For How Long
Hyper-converged infrastructure is on a tear. IDC estimated that third quarter 2017 worldwide hyper-converged infrastructure revenue rose 68.0 percent year-over-year to top the $1 billion mark, with the top four vendors seeing high double-digit and triple-digit growth and both large storage vendors and startups entering the market. Look for 2018 to be another banner year for the business as more business users discover the convenience and flexibility of hyper-converged infrastructure over build-your-own infrastructures, even though HCI is more expensive compared to traditional IT infrastructures.
This may be a temporary situation. The move by businesses to adopt the cloud for flexible compute and storage requirements will over time overtake much if not all of the value provided by HCI. Don't count on HCI for big growth beyond 2018.
Less Talk, More Action On IoT
Storage vendors were quick to jump aboard the IoT bandwagon by saying their wares could store IoT data. But IoT is more than storing data. That data is at the edge of the network, not the core, and must be stored – and acted on – at the edge.
Storage vendors in 2018 will seriously look at their value in the IoT business beyond providing a landing pad for what is often ephemeral data. We saw a start in 2017 when the Hitachi group of companies combined its storage, IoT, and big data businesses into a single organization now known as Hitachi Vantara and essentially creating the first company to bring all three capabilities to bear in a single entity.
GDPR To The Fore
Sometime in late May of this year, U.S. businesses will find that General Data Protection Regulation, or GDPR, has arrived. But for many of them, that realization will be late.
GDPR is a European Union regulation related to how personal information of individuals is stored and protected. It specifies fines of up to 2 percent or 4 percent of the worldwide revenue of a company which fails to provide the specified protection. And while it is a European regulation, U.S. companies will be impacted. A U.S. company storing personal data of European Union citizens, or which provides a platform on which such data is stored, will be responsible for protecting that data and for any penalties. So the first half of 2018 will see a rash of education from both storage and security technology providers aimed at bringing U.S. businesses, and channel partners, doing business in Europe up to date with GDPR.
Compute Will Move To The Storage
Back in the good old days data was stored on premises along with the servers, and life was easy. Today, however, data is stored where it is needed: on premises, in the cloud, or in devices at the network edge. Disparate data locations, combined with the difficulty of finding enough bandwidth to move data to where it is needed in a timely manner, are making it more important to move computing power closer to the data.
Thanks to newer more powerful or more power-efficient CPUs, compute can now be found and easily accessed in the cloud, in devices on the edge, and even on storage arrays themselves. Given that compute resources can be accessed or moved more quickly than data, expect 2018 to be year we see the portable compute resources wherever the data lives.