Telecom vertical drives India’s storage market

Article By : IDC

Aside from telecommunication, banking, manufacturing and government verticals continue to be key contributors to the positive trend of India's external storage market.

India's external storage market experienced a 13.8% growth year on year (YoY) amounting to $74.6 million (₹480.67 crore) in revenues for Q1 2017, according to IDC's Asia/Pacific Quarterly Enterprise Storage Tracker, Q1 2017.

IDC says that the growth in the external storage market is attributed to multimillion-dollar deals in telecommunication vertical. The banking, telecom, professional services, manufacturing and government sectors continued to be key contributors in Q1 2017. Aside from the major verticals mentioned, verticals such as securities, transportation and insurance also witnessed significant growth during this period.

"External Storage is getting very dynamic to address new age demands from emerging technologies such as real-time business analytics, Internet of Things, augmented reality, robotics, etc. Flash storage, hyper-converged infrastructure and software-defined storage technologies are getting more relevant across organisations like never before,” said Dileep Nadimpalli, Associate Research Manager, Enterprise Infrastructure at IDC.

The high-end storage segment witnessed a strong YoY growth in Q1 2017 due to large deployments from telecommunications, banking and government verticals. Entry-level storage saw a marginal growth, while mid-range external storage saw a marginal YoY decline in market share during Q1 2017.

All-flash array (AFA) among telecom, BFSI, IT/ITeS, government and manufacturing units also experienced significant growth in Q1 2017. Acceptance of AFA is also increasing as it offers better performance at an affordable price. Acceptance of hybrid flash arrays (HFA) is also gaining ground as this offers both capacity and performance with a single array.

Modernised IT infrastructure and reduced infrastructure footprint are the key IT priorities across organisations. Technologies such as hyper-converged infrastructure and software-defined storage are gaining traction to address both optimisation demands and remove infrastructure management complexities.

Sharyathi Nagesh, Senior Research Manager, Enterprise Infrastructure at IDC said, "Implementation of GST is expected to have a negative impact on enterprise IT for the next 2 quarters. In the long term, external storage will be impacted by growth in internal and ODM storage. Primarily driven by technology trends, like SDS and HCI, and wider acceptance of public cloud. In this challenging environment taking a solutions-centric approach, rather than a product-centric approach, with the right technology partnerships will help external storage suppliers stay ahead in their game."

Dell Inc. continued to lead the market with 43.4% market share followed by HPE. IBM and Netapp witnessed a significant YoY growth due to uptake from banking, telecom and government verticals.

Figure 1: *India's external storage market vendors revenue. (Source: IDC AP Storage Systems Tracker Q1 2017. *

The external enterprise storage systems market is expected to grow in single digit in terms of compound annual growth rate (CAGR) for the 2016–2021 time-period. Expecting increased storage spending from banking on analytics platforms and United Payment Interface to accommodate increased digital transactions. Also, expecting very large state surveillance projects and smart city projects to get closed in the next couple of quarters.

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