STORAGE AREA NETWORK (SAN) MARKET ANALYSIS

The global storage area network (SAN) market is estimated at US$ 17.46 Billion in 2023, and is projected to reach US$ 25.48 Billion by 2030, exhibiting a CAGR of 5.5% over the forecast period (2023-2030). 

SANs are highly sophisticated and costly pieces of storage equipment that are relatively complicated and propriety. Moreover, SANs are characterized as being virtually failure-proof. However, major outages and performance failures in the cloud in recent times have been related to failures of SANs or significant degradation in system performance. Since the nature of SAN is complex and prosperous, whenever there is a failure in SAN architecture, there will be a major complex problem for the organization. Furthermore, outages due to SAN failures are measured in hours and now minutes, which leads to such drawbacks of SANs and to leverage the cloud as a high performance, reliable, and resilient storage option, various enterprises are shifting beyond storage area network. This, in turn, is restraining growth of the global SAN market.

The Asia Pacific region dominated the global storage area network (SAN) market in 2022, followed by North America, Europe, Latin America, and Middle East and Africa.      

Figure 1: Global Storage Area Network (SAN) Market Share (%), By Region, 2022  

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A number of companies in Asia Pacific are focused on cost reduction and converting capital expenditures into operational expenditures. The growing adoption of outsourcing concepts is expected to offer major growth opportunities for IT infrastructure outsourcing services in the region. The frequent introduction of new concepts in the IT sector, such as big data, cloud computing, and bring your own device (BYOD), has made it challenging and complex for companies to manage their own data. Hence, these companies are dependent on IT infrastructure outsourcing service providers to streamline tasks related to data storage and management.

Large Enterprises segment is expected to drive the global storage area network (SAN) market growth during the forecast period.

Among end user, the large enterprises segment is expected to hold a major market share and grow at a higher CAGR over the forecast period. The segment is growing, owing to the benefits that users deploy, including faster backups, improved scalability, clustered file storage, increased data security, and others. Local Area Network-based network-attached storage networks are often subject to bandwidth limitations, which minimize efficiency and increase the time it takes to complete basic tasks and transfers. If the SAN takes away a significant portion of network traffic, the burden on Local Area Network's bandwidth decreases.

Figure 2: Global Storage Area Network (SAN) Market Share (%), By End User, 2022

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Major players operating in the global storage area network (SAN) market include IBM Corporation, Brocade Communications Systems, Inc., Dell Inc., QLogic Corporation, Citrix Systems, Inc., Hitachi Data Systems, NetApp, Inc., Hewlett-Packard Company, DataCore Software, NEC Corporation, Nutanix, and Cisco Systems, Inc.

Recent Developments:

In March 2020, Nutanix, company engaged in cloud introduced big data and analytics capabilities and unstructured data storage as a part of Nutanix Objects 2.0.

Market Driver:

• Rising demand for efficient backup operations: Previously, in a conventional approach, local area network (LAN) was used for data backup and restore functions that are particularly slow and significantly impact the efficiency of the whole operation. On the contrary, in the SAN approach, data moves smoothly across the SAN to tape devices as it does not utilize critical server I/O or CPU resources. Several issues can be improved with the integration of high-performance backup and restore capabilities with data availability and device sharing. This includes performance degradation, extended downtime periods, and shrinking backup windows. However, an increase in the overall server efficiency with server-less backup offered by SAN architecture is fueling the adoption of SAN across various verticals. Thus, these factors are expected to drive the market growth in the near future.

Market Restraint:

• Major challenges associated with interoperability: Several standards have been developed for Fibre Channel technology. Different interpretations of these standards by vendors have resulted in the development of products that sometimes cannot work together on the same network. Such issues related to interoperability are impacting the growth of the SAN market globally. Hence, these factors are expected to hamper the global storage area network (SAN) market growth over the forecast period.

Market Opportunity:

• Rising penetration of e-commerce websites: The growing proliferation of e-commerce websites has increased the adoption of online channels among consumers. These e-Commerce applications are highly resource-intensive, owing to the number of requests that are processed simultaneously per second. Thousands of customers visit, make orders, and pay per second, and all this information is needed to be stored in the database for later retrieval. SANs are being used to store information about high-traffic databases, due to high performance and rapid I/O characteristics.

• Impact of COVID-19: Due to the COVID-19 outbreak, the market has seen a halt in production and disruptions throughout the supply chain, which has led to a delayed expansion of manufacturing output across important manufacturing hubs. All chip manufacturing activities across several nations have been impacted by the restrictions that the governments have put in place. Moreover, the pandemic had considerably increased semiconductor demand in the consumer, telecommunications, and personal computer sectors, consumer electronics due to accelerating digital transformation and the adoption of remote work, remote study, movie streaming, and e-commerce technologies globally. Early in 2020, a number of manufacturers reduced their production capacity as a result of the worsening semiconductor crisis and decreasing demand for the global storage area network (SAN) market.

*Definition: A SAN consists of a communication infrastructure that provides physical connections, allowing any device to bridge across the network using interconnected elements, such as switches and directors.