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The last few weeks has seen quarterly results revealed by Dell, NetApp and Pure Storage that correspond to sales achieved during the summer, as activity increased following the first 18 months of the pandemic.
At the headline level, Dell remains the dominant storage supplier, despite its results somewhat stagnating from one year to the next. Its midrange products have exhibited some dynamism but that’s counter-balanced by poor performance at the top of the range.
Meanwhile, NetApp and Pure Storage saw growth of 23% in their all-flash array products. Pure Storage also indicated growth of 200% in its entry-level products based on QLC flash.
QLC flash is the cheapest and least-performant in I/O terms of the NAND flash generations, but that’s not necessarily a bad thing as it has useful benefits for the long-term storage of data that doesn’t require lots of read/write cycles.
QLC’s benefits correspond to many storage requirements, including among those of cloud suppliers, who are major consumers of infrastructure with needs that often require the best price/capacity ratio but with little in the way of I/O.
The cloud is a minority interest among these established suppliers of datacentre equipment.
Having said all that, according to NetApp its public cloud services are those in which sales are growing the most rapidly.
Dell: Top of the heap despite high-end shrinkage
Dell still sits atop the market for storage arrays with 1Q22 quarterly sales reported at $4bn. Although that is 1% less than achieved a year ago.
According to Dell, its midrange arrays, chiefly the PowerStore range have seen sales climb by 17% year-on-year (YoY), while its hyper-converged infrastructure products like VxRail have reported 34% more in revenues. On the other hand it is at the top of the range – such as PowerMax – where revenue shrinkage has occurred, but details have not been divulged.
“At the top of the range we have 42% of the market,” said director general of datacentre activity, Jeff Clarke. “But it’s a market that operates on long cycles and year ago enterprise purchases of this type of product were rising. Now, they are lower. Our sales have declined just as they have among our competitors that sell this type of product.”
According to the most recent survey of the market by IDC, published just prior to Dell’s results, the company achieved a 32.3% share of sales in the storage array market. That breaks down into shares of 36.8% for all-flash, 33.1% for hyper-converged infrastructure, 13.6% for storage software, and 50.7% of the backup appliance market.
Dell’s storage products are part of its Infrastructure Solutions Group, which also sells server and network equipment. This division realised turnover of $8.4bn, which represented growth of 3% year-on-year.
Company-wide, Dell realised turnover of $26.1bn – 15% growth year-on-year – for a global profit of $1.4bn, which represented growth of 21% year-on-year.
Its Client Solutions Group, PCs etc, showed quarterly revenue of $14.3bn (27% growth YoY), while subsidiary VMware’s revenue was $3.1bn (8% growth YoY).
NetApp: Public cloud hot
The latest quarterlies (1Q22) from NetApp show turnover of $1.46bn (+12% YoY) and $202m in profit (+162.3% YoY). Among these results, services sold via public cloud providers have seen revenues of $79m.
These services comprise virtual storage array products like Cloud Volumes, the admin tool Cloud Insights, and the Spot AI-driven cloud pricing service.
Turnover for cloud services, at $79m is not a lot compared to the rest, but that absolute figure masks growth of 155% YoY from $31m, with NetApp planning to augment that in the coming quarters.
“Our public cloud services serve to get us on board with the galloping economic growth of the cloud,” said NetApp CEO, George Kurian during a call with financial analysts. “That makes NetApp a strategic partner for enterprise customers, and that allows us to nibble at parts of the market supplementary to our historic datacentre activity.”
The remainder, making up $1.38bn is grouped by NetApp as “hybrid cloud”, which shows its intent in marketing terms to position products based around its Ontap OS filers and StorageGrid object storage towards hybrid cloud projects.
Among these products, designed for deployment in datacentres, its Ontap-based all-flash arrays, are the ones that have shown the most growth, up 23% YoY.
According to IDC, NetApp ranks second among storage array makers with 10.9% of the market.
Pure Storage: 3x more FlashArray//C sold
Pure Storage is a top six storage player which realised quarterly turnover of $498.8m. That hasn’t allowed Pure to mop up losses this quarter of $45.3m, however, notably as a result of outlays on the purchase of container storage software specialist Portworx.
Having said that, Pure achieved sales growth in its 2Q22 results of 23% compared to the same period last year, which was the strongest growth in the market and the best in the company’s history.
“Frankly, we expect to beat revenue records every quarter but this has been extraordinary,” said Charles Giancarlo, CEO of Pure Storage, speaking to financial analysts. “It has surpassed our expectations.”
Digging into the detail, sales of entry-level FlashArray//C tripled, as did licence sales of Portworx container storage software. In addition, subscription sales via the Pure-as-a-service offering also tripled, with quarterly sales of $171.9m dollars and comprising a third of contacts signed with customers.
Read more about storage suppliers
- Where now for storage? Dell EMC, NetApp and HPE. Part I: Storage supplier strategy in the cloud era: Dell EMC, NetApp and HPE. We snapshot the big six hardware makers, as they take things to the cloud and as-a-service models.
- Where now for storage? Hitachi, IBM and Pure Storage. Part II: Storage supplier strategy in the cloud era: Hitachi, IBM and Pure Storage. We snapshot the big six hardware makers, as they take things to the cloud and as-a-service models.
Pure Storage said it has added 380 new customers in the quarter, with a total now estimated to be around 10,000 organisations. Its 10 biggest customers contributed 20% of Pure’s quarterly revenue.
Pure Storage is optimistic, with CEO Giancarlo expecting $530m in revenue for the next quarter, which would correspond to a record growth of 29% YoY. This prediction is based on the “almost certain” closing of a contract for $10m worth of FlashArray//C with a large cloud provider.
“The last bastion of the hard drive is among the cloud providers,” said Giancarlo. “The great majority of their storage has been up until now on hard disks. But we think that a pivotal moment has come where they will start to deploy SSD arrays.”
“This is a great opportunity for us, because what we can realise with the large cloud providers can be repeated among the rest of the cloud suppliers.”