Driven largely by cloud service providers, the software-defined storage (SDS) market is projected to reach $86 billion by 2023 due to a tailwind of 28% compound annual growth rate, according to research by Omdia.
With increasing amounts of data related to video, big data, data analytics, artificial intelligence and machine learning, data center storage is shifting towards SDS. In short, SDS speeds up processing times and reduces complexities across data centers. The SDS market includes hyper-converged infrastructure (HCI) and standalone SDS products.
“HCI has become a runaway hit because of its ease of deployment and ongoing operation,” said Omdia's Dennis Hahn, principal analyst, data center storage, cloud and data center research practice, in a statement. “HCI represents an affordable way to add capacity, with small enterprises able to configure and manage the technology using generalists on their staff.
"Many enterprises like HCI as a pragmatic solution for meeting their immediate growth challenges. In contrast, a core data center storage solution would likely entail the use of skilled administrators to conduct equipment integration into the data center infrastructure.”
HCI shipments were estimated to have grown 24% year-over-year from 2018 to 2019, and are expected to chalk up a 56%, five-year CAGR by 2023. In the second quarter of last year, HCI revenue totaled $1.9 billion, which was a 27% year-over-year increase.
In an email to FierceTelecom, Hahn said that Dell EMC, Cisco and HPE were among the top HCI vendors last year.
Standalone SDS shipments grew 12% in 2019, and are forecast to achieve a 21% five-year CAGR by 2023. Furthermore, HCI is forecast to reach $43 billion by 2023, rising at a five-year CAGR of 47%, while standalone SDS is forecast to reach $42 billion by 2023 for a five-year CAGR of 18%, according to Omdia’s Data Center Software Defined Storage Market Tracker.
Cloud service providers accounted for 43% of the total SDS revenue last year, while service providers kicked in a mere 4%. Among service providers, CenturyLink announced late last year that it was offering a software-defined network storage service to its enterprise customers
While service providers are still finding their SDS footing, enterprises accounted for 53% of last year's SDS revenues, and are projected to account for 65% by 2023.
On the other hand, standalone SDS storage has been slower to take off in the enterprise sector. Hahn attributed the slower adoption to the lack of standards that would "help users marry their independent choice of SDS hardware to SDS software." Once those compatibility issues are worked out, Hahn expects standalone SDS to gain increased traction in the market place.
The large cloud providers—Amazon Web Services, Microsoft Azure, and Google Cloud Platform, to name the top-three—have fully committed to SDS for several years now because they have the in-house IT skills to implement it. While large enterprises, such as financial institutes, may have the in-house skills, most enterprises are just now starting to dip their toes in the SDS waters, often as an appliance offering.
The work by the Open Compute Project (OCP) will drive the creation of storage solutions that won't require the high-level skill sets, as well as a means to blend hardware and software options.
Hahn said in his email that his recent HCI and standalone projections and numbers were tallied prior to the coronavirus pandemic.
"We are still monitoring and assessing the impact to COVID-19," he said. "In my traditional storage tracker, which is about to publish, the calendar year 2020 revenue forecast has been lowered to 3.5% year-over-year growth from what was."