New forecasts from Omdia project that the data center (DC) storage market will reach $103 billion in revenue by 2028, signaling a significant recovery and growth following a challenging year in 2023.
This forecast, which encompasses both DC external storage arrays and server expansions, reflects not only robust growth but also increasing average selling prices (ASPs) for storage solutions.
The DC storage market faced challenges in 2023, with revenue dropping to $53 billion — a 16 percent decline year-over-year (YoY). Economic challenges and reduced IT spending were major contributors to this downturn.
Original design manufacturers (ODMs) in storage business were particularly hard-hit, with their revenue decreasing by over 30 percent as data center equipment spending temporarily shifted away from storage. In contrast, traditional storage OEM vendors demonstrated greater resilience, though they still experienced a small single-digit decline.
A significant constraint in 2023 was the reallocation of cloud service providers’ budgets towards purchasing costly GPUs, which impacted cloud storage shipments. However, the market is expected to rebound due to several key factors, including ongoing digital transformation, rapid data growth, advancements in AI, and the pressing need for storage modernization. These factors are expected to drive renewed growth, as industries become increasingly data-dependent.
Dennis Hahn, Principal Analyst for Data Storage at Omdia, emphasized that the slowdown in 2023 is likely to be short-lived. He noted that “growth is expected to rebound throughout the forecast period,” highlighting the strategic importance of storage and data management in modern digital enterprises. This is expected to ensure continued long-term investments in storage.
The market review from Omdia revealed that ODM vendors led the market in 2023 with a 32 percent revenue share, followed by Dell EMC with 20 percent, Huawei with 7 percent, NetApp with 5 percent, and Lenovo rounding out the top five with a 4 percent market share.
Baburajan Kizhakedath
