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many StorageSearch readers have asked...

will the enterprise SSD market be big enough for all these companies [list] to grow?

Zsolt Kerekes, editor - November 21, 2011

The market dynamics which underly the growth expected in the enterprise SSD market in 2012 to 2015 are well understood by all the business leaders I've spoken to in the past year - and by SSD market analysts too - but they are less clear in the investment community - from where most of these questions come from.

So this is a condensed and updated version of the explanations I've been giving to readers who ask me how all the growth rates they're hearing about from different enterprise SSD companies stack up.

So - will the enterprise SSD market really be big enough for all these companies [list] to grow?

I'd like you to think about this....

In 2010 less than 1% of datacenter servers had any SSD acceleration built in or directly connected.

In 2016 - 100% (nearly) of all new datacenter servers will include SSD acceleration and most will also include substantial amounts of SSD attached bulk storage. It could be a few years later. But there won't be much of a market for new servers which are 10x slower than the slowest SSD accelerated models.

That's not to say that the enterprise SSD market will be 100x larger in revenue in 5 or 6 years although I do believe it could grow to be a $50-100 billion market by 2020.

The reasons you cant just scale up and multiply past or present SSD market revenue numbers by numbers varying from x10 to x100 to predict the future market size are:-
  • users will need less servers than they need now to do the same work if each SSD accelerated server is 3x to 10x faster. (This reduces the multiplication factor.)
  • new SSD enabled data markets will create new demand for servers and SSDs which don't exist today. (This increases the multiplication factor - but in a way that's impossible to predict reliably.)
  • users will deploy significantly more SSD per server in future years than they do now. (Because they will have more confidence in what SSDs can do for their business and because SSDs will become more competitive as storage devices - compared to HDD RAID - and won't just be used because of their ROI as apps accelerators.)
  • SSDs will get cheaper. (So a 2010 $100K budget will buy more SSD in future years.)
Whatever the actual SSD market scale-up will be - x20, x50 or x100 - only time will tell. But along the way it will be a staggeringly high revenue growth rate in the next 3 to 5 years.

Simple message for the next few years is that no single oem or group of oems will be able to service all the demand for enterprise SSDs

That means large sales opportunities for enterprise SSD makers who make it easy for their customers to buy from them and offer credible products and credible pricing.

End users who buy enterprise SSDs will have different preferences about who they buy from (think - preference distribution curve). So an SSD oem who focuses on Fortune 500 accounts for example will not necessarily be the supplier of choice for small and medium sized user sites.

Where do resllers fit into this picture?

In my view - SSDs are not yet near to being a reseller market. The level of technical knowledge required to ensure that an SSD solution is needed and will actually do what is expected requires analysis skills which most resellers don't have. Auto-teiring products and the transition towards a pure SSD market will change that dynamic gradually.

Going back to the original question... I think there is enough room for all the SSD companies named in the reader's [list] to grow / maintain high double digit growth.

For the next 2-3 years it will be an easy ride. Then it will get tougher because it will become clearer which SSDs are better adapted for particular market apps.

I think there's room for maybe 10 to 15 enterprise SSD makers to each surpass multi-billion dollar revenues in the market shape of the future. Because they will be operating in 3 to 5 distinct market latency and applications segments where the characteristics of the SSDs are dramatically different.

More about that later. In the meantime you may be interested in these other enterprise SSD articles.

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In September 2012 - I realized that an important article was missing from my core list explaining why the enterprise SSD market is growing so fast and where its revenue heading.

3 key earlier articles had been:- But something was missing.

And I realized that an important 4th article was needed to alert readers to another new trend I've been seeing in 2012 - which will make the enterprise SSD market even bigger still than predicted by all those earlier models.

It was the home page blog iin september 2012 - but now it's got a new permalink.

You can't really understand the business dynamics of the enterprise SSD market without it.

See why for yourself in - the big market impact of SSD dark matter