The 10 Biggest Storage Stories Of 2016

Storage In 2016: More Of The Same, Only Much, Much More

Prior to 2016, storage industry watchers saw the rise of hyper-converged infrastructure, all-flash and hybrid flash storage and software-defined storage, and thought they would some day negatively impact the storage business as it has existed since EMC sold its first Symmetrix array to the IBM mainframe market.

It seemed to all come to a head in 2016. New ways of configuring, managing and buying storage have altered the business significantly, bringing upstarts to the forefront and sending stalwarts reeling. EMC, which started the modern storage industry? Sold to Dell in a blockbuster, industry-transforming deal.

The changes in the storage industry we saw in 2016 are only the precursor of what will happen in 2017 and beyond. Here’s a look at the top happenings in 2016.

(For more of our 2016 retrospective, check out 'CRN's 2016 Tech Year In Review.')

10. Storage Market Plateaus?

2016 may be the year the storage market started a long-term decline as data increasingly moved away from specialized storage equipment and toward the cloud, software-defined and server-based offerings.

Worldwide enterprise storage systems revenue in the second quarter of 2016 was essentially flat with revenue in the second quarter of 2015 at about $8.8 billion, according to research firm IDC. However, in the third quarter that part of the market fell about 3.2 percent over last year to, again, $8.8 billion. IDC did note that the flash storage and the hyperscale data center parts of the market continued to show solid growth in the third quarter.

9. Flash Storage Shows The Way Forward

While the rest of the storage market started to shrink, 2016 was a break-out year for flash storage. IDC estimated the total all-flash array market topped $1.1 billion in revenue during the third quarter of 2016, up 61.0 percent year over year. The hybrid flash array segment of the market reached $2.1 billion in revenue and 24.1 percent of the total storage market in the second quarter, IDC said.

Despite the quick maturing of the flash storage industry, there still is room for startups. But in the meantime, legacy storage vendors Dell EMC, NetApp, Hewlett-Packard Enterprise and IBM took four of the top five all flash spots in terms of revenue, leaving room at the top for only Pure Storage.

8. Software-Defined Storage Matures

VMware's successful and much-anticipated launch of VSAN 6.2, the latest iteration of its Virtual SAN that corrected several prior issues holding back the market for VSAN, signaled the maturity of software-defined storage and erased doubts about the importance of this business going forward.

Several other storage software vendors, including industry stalwarts like IBM HPE and Dell EMC along with smaller niche vendors like Ceph, Nexenta, DataCore, SwiftStack and Pivot3, enhanced their wares in 2016 as a way to take advantage of ever-more-powerful servers to move customers away from proprietary purpose-built storage solutions.

7. The Rise Of Hyper-Convergence

Hyper-converged infrastructure, which combines compute, storage, networking and virtualization resources into a single managed solution, grabbed significant mind-share in 2016 in large part to the closing of the long-awaited IPO of the largest vendor in this space, Nutanix. Research firm Gartner expects hyper-converged infrastructure revenue to top $2 billion in 2016, up 79 percent over 2015.

The year also saw the very successful release of VMware's VxRail software stack for building hyper-converged infrastructure appliances, and the much more low-key introduction of Cisco Systems' HyperFlex.

It was also a good year for acquisitions, with Nutanix acquiring PernixData; Pivot3 acquiring NexGen Storage; and Gridstore acquiring DCHQ for its ability to turn hyper-scale infrastructure into a service.

6. No Slowdown In Storage Vendor Acquisitions

At least 30 storage vendors disappeared in 2016 as they were acquired by their peers, including a couple of well-known companies that have been around for decades. The acquisitions, while painful for the employees of those companies, nonetheless show just how dynamic the storage industry is.

Among the top storage vendor acquisitions of 2016:

-- NetApp acquired SolidFire for its cloud-scalable all-flash storage technology.

-- Western Digital Acquired SanDisk as a way to expand its all-flash storage capabilities.

-- eFolder acquired Replibit, giving it access to data protection software for MSPs.

- Cavium acquired longtime storage interface developer QLogic.

-- StorageCraft acquired the data analytics capabilities of Gillware.

And let's not forget EMC, the world's largest storage vendor, which was acquired by Dell in a blockbuster $60-billion-plus deal.

5. A Dozen Or So Startups Want Their Shot

There was no slacking in the number of storage startups that exited stealth in 2016.

Among the storage startups coming out of stealth in 2016 were:

-- Cloudistics (hyper-converged infrastructure)

-- Symbolic IO (server-based high-density storage)

-- DriveScale (scale-out infrastructure converging compute and storage into industry-standard rack servers)

-- E8 Storage (software-defined NVMe-based storage solutions)

-- Diamanti (turnkey networking and storage appliances for Linux containers)

-- Datos IO (scale-out data protection software)

-- Datera (software to turn servers into cloud storage platforms)

-- Simply (high-performance RAID and Thunderbolt storage devices for media and creative professionals)

-- Igneous Systems (on-premise storage that sits behind the customer firewall but is managed by Igneous)

-- Kaleao (scalable ARM-based storage solutions)

4. Venture Capital Still Outperforms For Storage

Storage startups found the venture capital dollar spigots turned full on in 2016. Winners included:

-- $70M, Zerto (virtualized data center and cloud disaster recovery software)

-- $61M, Rubrik (converged data management platform)

-- $55M, Pivot3 (hyper-converged infrastructure)

-- $55M, Datrium (converged storage for private clouds)

-- $51M, Druva (software for protection and discovery of cloud business data)

-- $41M, Cloudian (hybrid cloud object storage systems)

-- $40M, Datera (software to turn servers into cloud storage platforms)

-- $35M, Elastifile (all-flash software-defined storage)

-- $32.5M, Qumulo (scale-out NAS technology)

-- $25M, CTERA (securely storing, syncing and sharing data)

-- $15M, DriveScale (scale-out computing and storage)

-- $15M, Cloudistics (hyper-converged infrastructure)

-- $13M, CloudEndure (live-migration and disaster recovery solutions)

-- $12.5M, Diamanti (turnkey networking and storage appliances for Linux containers)

-- $12M, E8 Storage (software-defined NVMe-based storage solutions)

3. Lenovo Gets Serious About The Data Center Infrastructure Business

Lenovo, which rocketed to worldwide IT fame with its 2004 purchase of IBM's PC business, followed by its early 2014 acquisition of IBM's x86-based server business, really wants to get into the data center.

Lenovo is now building its storage capabilities with a series of partnerships. These include a converged infrastructure solution based on Lenovo servers and Nimble all-flash and hybrid storage arrays, hyper-converged infrastructure offerings featuring Lenovo servers and either Nutanix or Pivot3 or SimpliVity software, and partnerships with various software-defined storage vendors.

2. NetApp Recovers

NetApp, which a few years ago saw an opportunity to become the No. 1 storage vendor by beating archrival EMC only to slip into a multiyear decline, has seen its sales bottom out and ready to rise. The company is now the largest independent storage vendor and second-largest flash storage vendor after Dell EMC by a comfortable margin.

The turnaround was most obvious in November when the company reported fiscal second-quarter 2017 revenue and earnings were down but growth is slated to start. It now has an all-flash storage business that is outgrowing the market, and has nearly completed its planned shift away from mature products to higher-margin, strategic offerings including flash storage, close partnerships with cloud providers, and its cloud-friendly Data Ontap storage operating system.

1. Dell: The New Undisputed King Of The Storage Ring

Dell in September closed its long-awaited acquisition of EMC, making it the world's largest data storage company. However, the company now needs to consolidate storage platforms. And it has to wrestle with how to build on its future-looking software-defined technology while ensuring it doesn't suffer from too quick a move away from its legacy proprietary storage business.

Remember, however, that the acquisition is more than storage: EMC makes Dell the world's largest data center infrastructure vendor. In addition to being the largest storage vendor, Dell EMC is also the world's second-largest server vendor, the industry leader in virtualization and budding cloud tech provider with VMware, and a networking and PC powerhouse.