Cloud Storage Spending Poised for Increase in 2016

More than over 70 percent of respondents said they are expecting to increase their storage spending over the next 12 months, compared to 2015.

cloud and storage

Organizations will continue to transform their storage environments in 2016, with most expecting to increase their storage spending over the next year, according to a 451 Research report.

Based on research conducted with more than 700 IT professionals worldwide, the report reveals that the proportion of spending on public cloud storage services will at least double over the next two years, largely at the expense of traditional, on-premises storage.

More than 70 percent of respondents said they expect to increase their storage spending over the next 12 months, compared to 2015.

However, storage spending growth in Europe and among very large organizations (over 10,000 employees) will be weaker than average, as will spending in the government and utilities verticals.

"The drivers of data growth vary quite widely between organizations, and almost all organizations are struggling to some degree," Simon Robinson, research vice president at 451, told eWEEK. "Our research tells us that the top driver overall is growth of file data, but the explosion of rich media data, especially high-definition video and other digital media, is creating some significant storage challenges in certain markets, such as entertainment and surveillance. Plus, more organizations are keeping more data to do increasingly sophisticated analysis, which pushes up storage costs."

On average, spending on public cloud storage will account for 17 percent of total enterprise storage spending by 2017, up from 8 percent today. In some verticals—such as retail—the public cloud will account for 25 percent of total storage spending by 2017, while spending on on-premises storage will fall from 70 percent in 2015 to 58 percent in 2017.

"Seeing our respondents call out Amazon as a top supplier in the next couple of years was a surprise," Robinson said. "Clearly, the public cloud is a reality for many organizations, but the fact that cloud providers are now being viewed as strategic suppliers—instead of niche or edge use cases—was surprising to me. Maybe related, respondents called out DR [disaster recovery] and backup as their top project for 2016; the cloud potentially has a big role to play here."

From a storage products perspective, spending will increase most on public cloud and all-flash arrays, while spending on traditional storage area network and network-attached storage products will be more muted, and the largest spending declines will be on tape products.

"Overall, as more applications continue to migrate to cloud, the requirements for on-premises storage will diminish, and the research tells us that is happening for real," Robinson said. "At the tactical and technology level, the storage that remains on-premises is transitioning to new approaches, especially flash-based approaches, hyperconverged approaches and object storage."