GCC AND LEVANT DATA STORAGE MARKET ANALYSIS

Market Overview

Data storage refers to recording information in a storage medium. There are different types of storage media are available including magnetic tape, optical discs, phonographic recording, DNA & RNA, handwriting, etc. Electronic data storage requires electric power to store and retrieve data. Technological advancements in information and social technology have led to growth in data storage. Small and medium-sized enterprises (SMEs) are increasingly leveraging big data and the internet of things (IoT)-enabled services to expand their presence in storage market.

The GCC and Levant data storage market was valued US$ 2,937.5 Mn in 2019 and expected to reach US$ 8,556.4 Mn by 2027.

Market Dynamics- Drivers

1. Technological advancements in information and social technology are expected to drive growth of the GCC and Levant Data storage data market during the forecast period

Many business enterprises are focused on data centers and services instead of duplication and social technology, in order to manage big data. However, growing amounts of data across enterprises have made these technologies inadequate in meeting desired requirements. Thus, business enterprises are rapidly shifting towards scale-out architecture such as storage virtualization and hyper-converged infrastructure from conventional architecture. As a result of this, enterprises can avail more improved and scalable platform, which is also cost-effective. Moreover, increasing demand for smartphones and IoT devices combined with high growth of social media channels has increased the demand for additional storage. Thus, these factors are expected to drive growth of the market during the forecast period.

2. High growth of cloud computing is expected to propel the GCC and Levant data storage market growth over the forecast period

Cloud computing has received significant traction in the recent past since it is cost-effective and hassle-free for storage facilities. In 2013, NetApp, Inc. reported that its revenue from cloud providers doubled. Moreover, NetApp announced that GCC and Levantly, over 200 cloud services were based on its technology. EMC Corporation is also targeting the cloud storage market aggressively. Therefore, these factors are expected to propel the GCC and Levant data storage market growth in the near future.

GCC Countries dominated the GCC and Levant data storage market in 2019, accounting for 77.1% share in terms of value, followed by Levant Countries.

Market Dynamics- Restraints

1. Limited options of remote storage management services are expected to hinder the GCC and Levant data storage market growth over the forecast period

Increasing competition in the IT industry has put immense pressure on businesses to increase returns at lower costs. Many organizations are focused on implementing cost-cutting measures such as decreasing the number of employees and outsourcing storage provisioning and monitoring. As a result of this, demand for remotely managed services has increased significantly with limited options available in the market. Thus, these factors are expected to hinder the market growth in the near future.

2. Slow responses offered by vendors to increasing demand is expected to hamper the GCC and Levant data storage market growth during the forecast period

Enterprises require vendors to respond quickly to their data storage requirements, in order to meet increasing demand for changing businesses and technological advancements. However, some of these enterprises are witnessing sluggish responses from vendors to increasing demand, which in turn, is expected to restrict growth of the GCC and Levant storage market growth during the forecast period.

Market Opportunities

1. Introduction of IoT and connected devices can present major business opportunities

According to Coherent Market Insights’ analysis, there are around 10 billion connected devices across the globe, which includes smartphones and laptops. According to the same source, this number is expected to triple in the next five years. Thus, the need for storage solutions that would load, reload, and identify relevant data in real-time is increasing. Moreover, the consumer storage devices such as HDD, SDD, and memory cards are expected to witness significant demand during the forecast period. As a result of this, enterprise data storage vendors would encounter robust demand for virtual storage cloud platforms from businesses that need to process terabytes of customer data. Thus, the advent of Internet of Things (IoT) is expected to present a huge opportunity for data storage vendors in the near future.

2. Massive shift towards converged infrastructure solutions from traditional can provide lucrative growth opportunities

The converged infrastructure market has become the go-to-market for a majority of IT infrastructure developers/service providers. A massive shift from conventional to converged infrastructure solutions offer major growth opportunities for enterprise data storage vendors. Moreover, converged infrastructure solutions minimize compatibility issues and streamline the process of managing servers, networking devices, and storage systems at minimal costs.

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Source: Coherent Market Insights

Market Trends

1. Growing demand for changes in OPEX and CAPEX

Over the past 10 years, the total cost of storage has increased by about 7% per year. This surge in prices has been mainly attributed to operational costs (OPEX), while the cost of hardware (CAPEX) has been relatively flat. According to the ongoing trend, CAPEX is expected to rise further and account for a greater share of the total cost of ownership, because of the increasing functionalities in hardware and rise in demand for storage capacity

2. Rising demand for secure hybrid storage in defense and aerospace

Aerospace and defense system designers seek storage solutions with reliability, encryption or other security features, compact size, high storage capacity and ability to withstand extreme temperature. Hence, hyper-convergence and software-defined networking form the ongoing trend in the aerospace and defense industry currently.

3. Increasing use of data storage in the BFSI sector

The banking and finance sectors are focusing more on data storage than marketing these days. BFSI firms are investing some of their marketing funds into new storage infrastructures, such as software-defined storage and hyper-converged infrastructure.

Segment information:

In GCC and Levant data storage market, by application segment, the Enterprise Data Storage, sub-segment dominated the GCC and Levant market in 2019, accounting for 83.6% share in terms of value, followed by Consumer Data Storage.

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Source: Coherent Market Insights

Regulations

UAE regulations

On February 23, 2013, a new competition law (Federal Law No. 4 of 2012), “The Competition Law” was implemented in the UAE. The law pursues to regulate market behavior, particularly in relation to misuse of merger control, dominant position and regulation of restrictive agreements.

In January 2015, the UAE Cabinet issued implementing regulations relating to the Competition Law (Cabinet Decision No. 37 of 2014 (the Regulations), which came into force on October 27, 2014. 

The Merger Law:

Applications for exemptions and merger approvals along with certain specified documents should be submitted to the competition department of the UAE Ministry of Economy (the Department). The UAE Minister of Economy needs to reach a conclusion within 90 days of notifying the respective parties of the receipt of the application. This period can be extended by a further 45 days.

Value Chain Analysis

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Competitive Section

Key players operating in the GCC and Levant data storage market are Nexenta Systems, IBM Corporation, EMC Corporation (Dell Inc.), Microsoft Corporation, Hitachi Data Systems (Hitachi Ltd), VMware, Inc., Sandisk Corporation, Hewlett Packard Enterprise Co., Open Text Corp., DataDirect Networks (DDN), and NetApp Inc.

Key Developments

1. Major companies in the market are focused on mergers and acquisitions, in order to enhance the market presence. For instance, in May 2019, DataDirect Networks (DDN), a U.S.-based cloud management company, acquired Nexenta Systems, a software-defined storage (SDS) provider.
2. Key players in the market are involved in product launches, in order to expand the product portfolio. For instance, in October 2019, IBM Corporation introduced storage software for a new appliance targeting artificial intelligence and data analytics workloads.