OCP storage market set to more than double by 2023

The market for storage equipment certified by the Open Compute Project Foundation (OCP) is expected to more than double from 2019 to 2023 as vendors move to offer new products compliant with the organization’s standards.

Global revenue for OCP storage products will expand to $5.4 billion in 2023, up from $2.5 billion in 2019, according to the Data Center Storage Equipment Market Tracker report from IHS Markit. OCP storage revenue is expected to rise by 27 percent this year.

OCP storage represented 4.5 percent of overall server external storage revenue in the first quarter of 2019. Non-OCP white box equipment accounted for a 24.5 percent share, while traditional servers commanded 71 percent of the market.

“The market for storage equipment that complies with OCP-accepted and inspired specifications has lagged that of servers, but now it is showing signs of gaining momentum,” said Dennis Hahn, principal analyst at IHS Markit.

“Rising activity and solid member participation within the OCP storage community are sparking increased interest from equipment suppliers. From the beginning, OCP founding board member companies Facebook, Intel, Microsoft, Rackspace and Goldman Sachs have been ramping up their deployment OCP storage products. In addition, OCP member companies, especially in Asia, are increasingly creating OCP storage products, as demand from non-board member buyers has continued to grow at hyperscalers and enterprises across the globe.”

Since its inception, OCP has worked to drive innovation in and around the data center industry, bringing together thousands of engineers from now nearly 200 member organizations. The demands for data in the modern data center continue to expand with the growth of the internet of things (IoT), security and edge computing. This is making storage ever more important for enterprises.

“Open partnerships on data center storage hardware helps buyers through equipment savings and by cutting operating usage costs,” Hahn said. “By offering open products, vendors can better engage their DC customers in a dialogue about best practices that pay off in the long-run. Enterprises sourcing products are wise to avoid lock-in at both software and hardware levels, unless the products are providing quick pay-back on truly unique technologies.”

A new source of demand likely to drive OCP adoption is the market for edge products, especially for telcos, that are traditionally drawn to standards. Another new demand generator will be software-defined storage (SDS), which separates the purchasing of storage hardware from the software, where the hardware can then benefit from standards.

The current drivers for adoption of OCP storage equipment are still those associated with early adoption, such as cost reduction, rack density and power efficiency. However, within the next four years, companies will increasingly seek OCP storage equipment because of its conformance to specifications. Standards allow for greater choice when marrying together SDS hardware and software to create storage solutions, and allow for consistent remote edge storage deployment and its associated support.

Other data center storage equipment highlights from the IHS Markit report include:

• The total server external data center storage market revenue will reach $63 billion by 2023, up from $40 billion in 2018, rising at a five-year CAGR of 9.7 percent.
• Array revenue growth was flat year-over-year in in the first quarter of 2019. The all-flash performance category grew by 16 percent year-over-year while hybrid performance declined 9 percent and capacity-optimized declined by 17.5 percent.
• IHS Markit forecasts cloud service provider (CSP) revenue share growth will slow down, but still will account for a 49 percent share in 2023, with telco ramping to a 10 percent share and enterprise dropping to 41 percent.​
• Fibre Channel (FC) controller ports are forecast to account for 24 percent share of total controller ports in 2023, down from a 26 percent share in 2019; with 32G FC at 38 percent of total FC ports and 16G FC at 58 percent of FC ports in 2019

-- Dennis Hahn, analyst, IHS Markit, USA.