The Storage Systems market – including both External Storage (arrays) and Internal Storage (inside servers) – is projected to go through a number of transitions for the next few years that will change how storage is used, the types of products developed, and the underlying technologies. The major transitions, most of which have already been underway, include growing Cloud-based storage, popularity of all-Flash storage systems, and adoption of NVMe. Driven by these market changes, we are predicting the following:
- We forecast the overall Storage System market to be relatively flat for the next five years (2016 through 2021). However, during the forecast period, we anticipate that the use of Internal Storage will rise incrementally, partially offsetting the market erosion we anticipate for External Storage. We believe Cloud service providers will continue to mainly use Internal Storage.
- The market demand for all-flash systems – or All Flash Arrays (AFA) – is expected to continue growing for many years, driving both revenue and shipment volumes for this class of products higher through 2021. We forecast AFA revenue to grow at a five-year compounded annual growth rate (CAGR) of 19 percent, reaching close to $12 B by 2021.
- We believe the quantity of Fiber Channel (FC) port shipments on External Storage Systems will erode through the forecast time period. However, due to the mix shift toward higher-speed FC ports (16 Gbps and then 32 Gbps), we expect the throughput capacity of FC shipments to increase at a five-year CAGR of 12 percent. 32 Gbps FC ports are projected to compose about half of the FC port shipments by 2021.
- We predict that demand for Ethernet ports on External Storage Systems will surge during the forecast period due to the availability of NVMe over Fabrics (NVMe-oF). Hence, we forecast Ethernet port shipments to increase through 2021 with throughput capacity growing at a five-year CAGR of 28 percent. 25/50/100 Gbps Ethernet ports are projected to compose approximately 40 percent of Ethernet port shipments by 2021.