Capacity Utilization, System Performance, and Hybrid Arrays to Drive South Africa External Storage Market 

Johannesburg, March 25, 2014 – The South African external storage market value declined 32.4% year on year to $38.11 million in Q4 2013, according to the EMEA Quarterly Storage Tracker published by international marketing and research agency IDC. On an annual basis, market value declined 26.5% to $175.51 million in 2013. The Tracker further predicts that external storage market value is expected to grow at a five-year compound annual growth rate (CAGR) of 5.2% to reach $226.26 million in 2018.

Besides customer budget constraints, market value declines were primarily due to the rand's depreciation against the US dollar by more than 18.0% year on year in 2013. In Q4 2013, there were 10 primary vendors in the market, in which EMC, Hitachi Data Systems, Dell, and IBM together accounted for 79.7% of the market value share. Between Q4 2012 and Q4 2013, Dell’s performance was relatively inconsistent, with the vendor remaining outside the top four vendors for much of the period before starting to regain its position in Q3 2013. In comparison, Hitachi Data Systems has been an outperformer since Q4 2012, primarily due to the acquisition of its sole distributor, Shoden Data Systems, in Q1 2012.  

“In the current slow-growth economic environment, external storage vendors have shifted their focus to mid-market customers by bundling storage hardware with system management applications to maximize capacity utilization," says Jiaqi Sun, research analyst at IDC South Africa. "With increasing market competition, vendors have adopted several business strategies to maintain their market shares such as channel expansion, brand equity, and value-added components in storage systems.”

In terms of storage protocols, fiber channel and NAS were the primary connecting interfaces, together representing 77.9% of market value share in Q4 2013. In the future, iSCSI is expected to gain traction, although slowly due to its increasing capability to support low-to-mid tier performance at a much lower cost than other protocols.

"For most vendors in the market, system management applications, virtualized storage solutions, and hybrid disk-flash systems have been the primary focuses for technology developments. These new developments aim to meet customers’ challenges of maximizing storage capacity utilization, enhancing storage system performance and storing unstructured data cost-effectively under current economic environment" says Sun. “In the next five years, uptake of integrated systems and cloud-based storage solutions will improve IT resource utilization, simplify storage management and maintenance, and minimize information silos for end users.”

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For more information about IDC's EMEA Quarterly Storage Tracker, please contact Marina Kostova atmkostova@idc.com , Andries Lombaard at alombaard@idc.com or Jiaqi Sun at jsun@idc.com.