As 2016 winds down, we take a look at what has happened. In addition to all the surprises in the political world we have seen some major changes in the world of enterprise storage.
Big changes have occurred in the storage vendor space. Who would have thought two years ago that EMC would be acquired by Dell and no longer exist as EMC?
HP has also undergone some major changes. First the split into HP printer and personal computer business and HPE (HP Enterprise) which originally had servers, storage, networking, consulting and support; Services; Software; and Financial Services. Shortly thereafter, HPE sold off the Enterprise Services division to CSC and later announced a “spin-merge” with Micro Focus International where Micro Focus would acquire HPE’s “non-Core” software. In October HPE shut down its HP Helion public cloud — its cloud computing platform.
While flash storage has exploded, AFA vendors have been struggling without a complete portfolio of infrastructure offerings. The 5 year TCO per bit of 14TB flash modules is now lower than hard disks. The concern over the supply of flash memory is being answered with 19 new FAB lines being built in 2016 and 2017 according to SEMI.ORG.
The number of FC vendors is down to two as our long-time partner Brocade is being acquired by Broadcom who had previously acquired Emulex. The other major FC vendor being CISCO.
The number of storage media vendors is also down to Seagate and Western Digital. Gartner estimates that the hard disk market is still a $10B market with a CAGR of 4% but the flash market is at $9.4B by the end of 2016 and growing at a CAGR of 20%. So while flash revenue will overtake hard disks in 2017, there still is a sizable market for hard disks. However, the enterprise share of hard disk revenues is falling fast due to the increasing cloud ODM market share.
The changes we have seen in the IT infrastructure market place in 2016 is not a surprise. We have seen this developing over the past few years. How companies have responded to this is very different. Some are doubling down on infrastructure through acquisitions and others are selling off parts of their company to focus more on infrastructure. While Hitachi Data Systems has earned a reputation as a leading enterprise storage vendor, we have chosen a different path. Instead of selling off pieces of our business, we continue to develop and deliver the best in class IT infrastructure while we join with other divisions in the Hitachi company to offer something unique in the market place. We're one of only a few global organizations (think GE and Siemens) with both the industrial and IT expertise to truly lead in the $7.1Trillion IoT market opportunity: and we're well on our way. We're not a pure play IT company. If you look at where we're investing, you'll see a pattern emerge. Pantascene, Avrio, oXya and Pentaho represent our most recent acquisitions, and all are focused on extending our capabilities in cloud, Big Data and IoT, as well as our ability to help our customers complete their Digital Transformation journeys. We’re more closely aligning the key areas of our business (Hitachi Data Systems, Hitachi Consulting, Hitachi Automotive and Hitachi R&D, etc.) to extend and accelerate our leadership.
While digital transformation and IoT may be the hot topic today, Hitachi’s overall strategy is still focused on Social Innovation. That has sustained Hitachi for over 105 years. Our Hitachi Data Systems President, Brian Householder has stated that we need to work to a double bottom line. One bottom line for our business and the other bottom line for Social Innovation, making the world a safer, smarter, healthier world.