Worldwide Server and Enterprise Storage Systems Markets Will Decline in 2020, Impacted by the COVID-19 Pandemic, According to IDC

FRAMINGHAM, Mass. — (BUSINESS WIRE) — March 27, 2020 — End user spending on IT infrastructure (server and enterprise storage systems) will decline in 2020 as a result of the widespread coronavirus pandemic. According to the International Data Corporation ( IDC) Worldwide Quarterly Server Tracker and Worldwide Quarterly Enterprise Storage Systems Tracker, under the current probable scenario server market revenues will decline 3.4% year over year to $88.6 billion and external enterprise storage systems (ESS) revenues will decline 5.5% to $28.7 billion in 2020. The server market is expected to decline 11.0% in Q1 and 8.9% in Q2 and then return to growth in the second half of the year. The external ESS market is forecast to decline 7.3% in Q1 and 12.4% in Q2 before returning to slight growth by the end of 2020 with further recovery expected in 2021.

IDC developed three forecast scenarios (optimistic, probable, and pessimistic) for the impact of COVID-19 on the IT infrastructure markets. The probable scenario assumes a broad negative impact starting in China and spreading into other regions before slowing toward end of the year. Elements of the impact include changing demand expectations from various groups of IT buyers, supply chain shortages and logistical delays, short-term component price increases, and a suppressed economic and social climate. The current forecast is based on the probable scenario as of March 26, 2020. However, as the situation continues to unfold, the forecasts might be adjusted further.

The fast-changing environment has revealed some remarkable differences in how the pandemic has affected various segments of the market. As the first to be hit by the coronavirus, China will see the greatest negative impact in the first quarter of 2020 while other regions will start to experience the impact in the second quarter. Similarly, some industries (transportation, hospitality, retail, etc.) are facing significantly reduced consumer activity and business closures and others are being hit by an unexpected wave of demand for services, including video streaming, Web conferencing, and online retail. Facing economic uncertainty, many businesses are being forced to consider more expedited adoption of cloud services to fulfill their compute and storage needs. This spike in demand put unplanned pressure on the IT infrastructure in cloud service provider datacenters leading to growing demand for servers and system components. As a result, the IT Infrastructure market has two submarkets going in different directions: decreasing demand from enterprise buyers and increasing demand from cloud service providers. This dynamic is impacting the server market the most, resulting in just a moderate decline for the overall market in 2020. The external storage systems market, with a higher share of enterprise buyers, will experience a deeper decline in 2020.

Worldwide End User Spend on Servers, 2019, 2020 and 2024 and Five-Year CAGR (value in $ billions)

IT Infrastructure Market

Market Segment

2019 Value

2020 Value

2020 Growth

2024 Value

2019-2024 CAGR

Servers

x86

$83.8

$81.9

-2.2%

$109.8

5.6%

non-x86

$8.0

$6.7

-16.0%

$6.8

-3.3%

Total Server

$91.7

$88.6

-3.4%

$116.6

4.9%

Source: IDC Worldwide Quarterly Server Tracker, March 26, 2020

Worldwide End User Spend on External Enterprise Storage Systems, 2019, 2020 and 2024 and Five-Year CAGR (Value in $ billions)

IT Infrastructure Market

Market Segment

2019 Value

2020 Value

2020 Growth

2024 Value

2019-2024 CAGR

External ESS

External RAID

$30.0

$28.3

-5.7%

$32.0

1.3%

Storage Expansion*

$0.4

$0.5

9.6%

$0.4

-2.4%

Total External ESS

$30.4

$28.7

-5.5%

$32.4

1.3%

Source: IDC Worldwide Quarterly Enterprise Storage Systems Tracker, March 26, 2020


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