IT moves to software-defined storage

In the previous article, we saw that the flash memory market is growing faster than predicted. Another major technology shift in the storage space is software-defined storage (or SDS). A study by Gartner predicted that by 2019, 70% of existing storage array solutions will be available as a “software only” version. The research firm also predicted that by 2020, 70% to 80% of unstructured data will be stored in less expensive storage hardware managed by SDS systems. The below graph shows that SDS will overtake traditional enterprise storage by 2020.

Enterprise Storage Moves to Software-Defined Storage

What is software-defined storage?

Software-defined storage separates storage hardware from the software that manages the storage infrastructure. It provides functions such as de-duplication, replication, snapshots, and backup and restore capabilities. Enterprises can design their own application and leverage multiple storage hardware without worrying about interoperability and under or over utilization of servers.

Startups in SDS market

Venture capitalists are optimistic about SDS. In 2014, Mirantis raised $100 million, Maxta raised $25 million, Formation Data Systems raised $24.2 million, SwiftStack raised $16 million, and Hedvig raised 12.5 million. In 2015, Springpath raised $34 million. Other startups in this space are Scality and PernixData.

Tech leaders in the SDS market

According to IDC Worldwide Storage Software QView, EMC (EMC), IBM (IBM), and Symantec (SYMC) led the storage software market in 2Q14 with market shares of 25.9%, 16%, and 13.3%, respectively. Some tech leaders entered the SDS space by acquiring startups, while some designed the technology in-house.

EMC entered the SDS space by acquiring ScaleIO in July 2013 and Red Hat (RHT) entered the space by acquiring Inktank in April 2014. On the other hand, IBM has committed $1 billion over the next five years to develop its software storage portfolio.

According to a report by Research and Markets, the SDS market is expected to grow from $1.4 billion in 2014 to $6.2 billion in 2019, growing at a compounded annual rate of 34.6%.

To get exposure in IBM and EMC, you can invest in the XLK Technology Select Sector SPDR (XLK). XLK has a 3.39% holding in IBM and 1.21% holding in EMC.

Latest articles

Apple Arcade (AAPL) is a subscription gaming service that was unveiled at Apple’s annual event last week. The service will launch on September 19.

Cannabis legalization is gaining traction not only in the US but also globally. The third presidential Democratic debate was held on September 12.

Google has agreed to make a one-time settlement of over $945 million euros to the French ministry. The ministry accused Google of evading taxes.

In Q4 2018, legendary investor George Soros sold all his holding in Apple (AAPL). In Q3 2018, Apple represented around 0.2% of his total portfolio.

Jim Chanos, the founder and president of Kynikos Associates, is a long-time short-seller of Tesla stock. Tesla stock has fallen 17.5% in the last year.

Despite Aurora Cannabis's subdued results, Cowen initiated coverage on five cannabis stocks: CRLBF, GTBIF, CURLF, MMNFF, and ACRGF.