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The drivers in the storage market
A number of factors are affecting the storage industry, and the channel can benefit from understanding the dynamics of the market
January is a Marmite month. Some people love it because it represents the start of a new year and a time to slough off the old one and look forward with optimism. Others find it a struggle to get back into the swing of things after the extended break over Christmas. It doesn’t help that, for many, January is a month of enforced abstinence and belt-tightening as they seek to recover from the festive blowout in December.
Whatever their sentiment about January, optimists and pessimists alike usually can’t help wondering what the year has in store for them, their work and the world around them. Why should the storage market be any different?
When asking people in the storage industry what the biggest drivers in the market are likely to be in 2023, it becomes clear that three areas stand out for nearly all of them: the cloud, security and environmental, social and governance (ESG) factors.
Among the clouds
Dell Technologies’ vice-president of UK channel, Rob Tomlin, predicts an industry shift to true multicloud architectures. “These use the compute services of whatever clouds you embrace, but also focus on turning critical capabilities ‘horizontal’ across the multicloud environment,” he says.
There’s been a strong focus on mid-range storage and storage as a service through Dell’s APEX offerings, he adds. “[The consumption model] has become significantly popular among our customers as it offers them the best of both worlds – the public cloud flexibility and agility they want and the private cloud protection they need.
“Many customers have held off deciding between having a full public cloud or a multicloud approach, but they can no longer afford to delay.”
According to Tomlin, data growth and multicloud present “many significant opportunities” for partners to deliver outcome-based solutions to customers. “Those opportunities exist across the entire data lifecycle, from delivering discovery services around modernising and protecting the customer’s environment, to managing, delivering and simplifying what can be a complex multicloud world,” he says.
“[Partners that provide] an end-to-end offering to help customers with the transition to multi-cloud are the ones that are coming out on top. No matter the partner’s size, this is where customers see value.”
David Friend, CEO and co-founder at Wasabi, is equally positive about the cloud, saying: “The bottom line for the channel is that cloud data storage has a nearly infinite market potential, and the drivers influencing companies to move their data to the cloud will only get stronger over time as the savings become more obvious.”
The cloud is becoming more diverse from a vendor perspective, he adds. “The channel has a major opportunity to put all the pieces together for customers. For example, if a company needs a backup solution for its new servers, the channel partner might sell a bundle composed of two parts: a solution from one vendor handling scheduling and recording backups, and another solution that handles the storage.”
Channel partners that have been selling hardware storage solutions for the past 40 years are turning to cloud storage instead, says Friend, adding that there are customers that “don’t want to own and operate their own storage hardware”.
David Friend, Wasabi
“Often, the applications that customers are running are easier to implement in the cloud, especially those that support a work-from-home user base. Customers lean on their channel partners for advice on how to save money,” he says.
Partners could use their existing trusted adviser relationships with customers to help them migrate infrastructure such as storage to the cloud, saving money for the customer and making money for themselves in the process, adds Friend.
Matt Child, UK and Ireland managing director of advanced solutions at TD Synnex, highlights hybrid converged infrastructure (HCI) and everything as a service (EaaS) as two trends to watch.
“HCI is now accepted as the way forward for enterprise infrastructures, and that’s going to see organisations having data sitting inside multiple clouds and on-premises. At the same time, all the major hyperscale vendors are moving towards EaaS and these related trends will see a huge opportunity for partners to provide management, orchestration, monitoring and protection of data,” he says.
Melissa Lyons, senior director of channels, Americas, at Scality, predicts tighter integration between managed cloud services and object storage. “Customers value cloud-like storage services but show a preference for them from the comfort of their own datacentre infrastructure,” she says. “As such, we will see increasing partnerships between object storage vendors and large OEMs or managed service providers [MSPs to provide fully integrated, private cloud S3 storage-as-a-service offerings.”
She warns that while the cloud delivers on its “cheaper and better” promise early on, margins take a hit as organisations scale and growth slows – often referred to as “the cloud paradox”. To mitigate this, more users are repatriating some cloud-based workloads back on-premises, Lyons claims.
“Channel partners are in an ideal position to help them rotate to a hybrid strategy that can optimise their infrastructure and reduce costs. This trend will accelerate in 2023,” she says.
Andy Palmer, co-founder and CEO of Tamr, says the move to the cloud has turned data storage into a commodity. “And that’s not a bad thing. While data storage remains important, it is no longer the focus of the conversation. Companies today assume data storage is inexpensive, highly available and performant – and that availability and performance will continue to improve at a rapid pace while costs continue to decrease.”
Security a ‘key driver’
One issue that is becoming increasingly important for many organisations is data security, and that is being reflected in the priorities of the data storage industry.
Tomlin at Dell describes cyber security and the protection of data as a key driver: “Companies increasingly recognise the importance of protecting against ransomware attacks and having a robust enough backup solution to get back up and running with their most critical data safe.”
Customers are keen to prioritise cyber security. “Securing your data nowadays is as important as managing it,” Tomlin says. “With the explosion of data, there is an explosion of potential risks. Companies must store and secure correctly in the face of increasingly complex workloads and the constant threat of cyber attacks. We see data protection and cyber resilience constantly growing.”
Florian Malecki, executive vice-president of marketing at Arcserve, highlights cyber recovery as a service (CRaaS) as a significant driver of growth in 2023. “CRaaS is a service whose time has come,” he says, “especially as ransomware attacks continue unabated, forcing victims to pay a high price to recover their data. IDC believes CRaaS can yield high-growth opportunities with solid margins for MSPs that can take advantage of it.”
Backing up data is one thing, but the real test is whether a company can recover data promptly after a cyber attack or other disruption. “Too many MSPs and their customers believe that disaster preparedness begins and ends with backing up data, and forget that backup alone is not enough,” he warns. “In 2023, I think MSPs will direct more efforts toward helping customers quickly recover their data in an emergency. The first step in these efforts will be advising customers to develop a solid recovery plan.”
Paul Speciale, chief marketing officer at Scality, says data security considerations have always been top of mind for customers. “But in 2023, IT leaders will evaluate every solution, including data storage, by its ability to protect data from the multiplicity of threat vectors,” he says.
He believes that security “will dominate IT-buying criteria”, including for data storage. Although supply chain issues and economic challenges will continue to affect storage projects in 2023, there will be an exception for those that can show tangible return on investment (ROI) on ransomware protection initiatives.
“This will present an opportunity for big data storage solutions with the intelligence to address current gaps in multi-level security, detection and data immutability for ransomware protection and fast business recoverability,” says Speciale.
Eric Herzog, chief marketing officer at Infinidat, expects “a burst of realisation” across the channel in 2023 that storage needs to be integrated into a cyber security strategy, adding: “This ‘moment of truth’ that is expected in 2023 has been building up over the past couple of years.”
Incorporating storage into the customer’s overall cyber security strategy will enable channel partners to deliver more comprehensive solutions, uniting security and cyber storage into a single solution.
Eric Herzog, Infinidat
“By doing so, channel partners are covering all the bases,” says Herzog. “For partners, it allows them to increase the revenue opportunities and profit. Security allows partners to combine a number of different components. Cyber storage is critical as a key component to an overall, corporate cyber security approach.”
Darren Gross, Tintri director of EMEA channels, agrees that data protection, including ransomware mitigation and recovery, will be an important area for growth. “Ransomware attacks have become a significant global threat to nearly every organisation,” he says. “Organisations need to plan for this cyber-protection failure and implement a plan for recovering from such an attack. The right plan and technology stack will play a vital role in the successful recovery and resuming of normal operations. It is no longer a matter of ‘if’, but ‘when’.”
Corporate vice-president of marketing at Spectra Logic, Betsy Doughty, says vendors that deliver solutions to help users become more ransomware resilient will continue to be sought after as trusted advisers.
“Channel partners are taking major steps forward as trusted advisers as they become more familiar with issues relevant to users, such as tackling ransomware and offering ways to mitigate attacks. We’ve seen success when the channel leads with stories of ransomware survival,” she says.
“Customers genuinely seem interested in attending events with this as a primary topic and a promise to discuss strategies to help them prepare and prevent attacks,” she adds.
Offering a slightly different perspective, Quantum senior director of channel sales, Guillaume Crapart, claims that the threat posed by ransomware has prompted customers to “rediscover” their enthusiasm for tape.
“Sales have skyrocketed in recent years as companies have come to the realisation that one of the best ways to defend against the number one cyber threat – ransomware – is to keep sensitive files and documents from being online in the first place,” he says.
Renewed enthusiasm for tape presents a great opportunity for channel partners, he argues. “The technology is easy to understand and therefore easy to sell. For customers, it is highly effective in providing a crucial back-up method in the event of a security breach,” he adds.
This “reuse” or repurposing of “old technology” provides the segue into another potential area of growth in 2023 – ESG.
Geoff Greenlaw, Pure Storage vice-president for EMEA & LATAM channel sales, claims that ESG is now a top three issue for customers.
“Datacentre power consumption will continue to be a major challenge in 2023. The focus will be primarily on costs, given the current economic situation and the fact that IT budgets are growing in single digits. However, pressure from climate change is also driving unprecedented upheaval,” he adds.
Channel partners should educate themselves on sustainability to help customers make informed decisions. “[Partners are] ideally placed to advise on power savings and consumption, cooling, space savings – anything that can drive datacentre costs down,” Greenlaw says. If they don’t adopt this approach, they could be left behind in an increasingly competitive, changing and tightening market.
Greenlaw expects channel partners will need “to communicate with customers in a different language that goes beyond tech and encompasses financial and ESG literacy”.
ESG is a high priority for the channel and customers. “Many partners are creating mini boards or steering committees to address the issue, and sustainability is now a top three criteria in all RFPs [requests for proposal] we receive. Customers are demanding that ESG be addressed and partners need to be able to respond accordingly,” he adds.
This trend will accelerate in 2023, Greenlaw believes, regardless of any economic downturn. “A key reason for this is that if a storage vendor can demonstrate an 80% reduction in power and cooling costs, this will become very compelling to customers in terms of ESG commitments and the desire to reduce costs,” he says.
Scality’s Lyons points to a convergence of increased awareness on climate change and an extended economic downturn, which will prompt enterprises “to refocus their IT budgets on solutions that can deliver savings and ROI in operational costs through reduced power consumption, opening up new opportunities for channel companies as they partner with their customers in these efforts”.
She notes the storage industry has already focused attention on this area through the Storage Networking Industry Association (SNIA) Green Storage Initiative, which aims to focus on standards for lower power consumption from large-scale data storage systems.
“Vendor and service provider offerings will emerge with innovations that reduce power consumption through smart resource utilisation and use of the latest low-power and high storage density platforms,” she adds. “This will provide measurable savings in power consumption and cooling to reduce environmental impact from storage.”
Infinidat’s Herzog believes the consolidation of storage arrays could be the start for ESG. He describes storage consolidation as a “quick win” for IT leaders seeking to demonstrate a commitment to sustainability and a contribution to an organisation’s green efforts to reduce its carbon footprint.
It’s unlikely to end there. “Momentum is building for green IT to sweep the market in 2023 and beyond,” adds Herzog.
Read more about the channel in 2023
- A fresh year is looming and it’s already clear what most of the major themes will be, including security, sustainability and hybrid working.
- Channel Forum event concludes with a sense that although there are clouds on the economic horizon, the fundamentals for the channel are sound and the reasons for customers to keep spending still exist.
- The channel is already seen as a repository of security expertise, and the pressure to deliver that is only set to increase in 2023.