MIZUHO SECURITIES USA INC. | US EQUITY RESEARCH
Summary
For this, the first edition of Mi-Tech's IT data center survey, we take a look at what we plan to be a bi-annual survey of the IT industry supply chain to gauge storage and technology capex trends driving the future data center roadmap. Our initial survey polled 53 IT industry respondents (CIOs/CTOs/Project/Product managers) on topics such as spending trends, SSDs, HDDs, key players, and technology roadmaps. The key takeaways from our first survey of trackable industry trends are below.
Key Points
Survey Universe. Our survey pooled responses from 53 IT industry respondents including CIOs/CTOs (41% of survey), and Project/Product Managers (58%), with 70% from companies with >500 employees (17% >3000 employees).
Data Center Spending Trends in 2016. Approximately 66% of respondents noted that data center (DC) spend had increased y/y while 26% stated their spending remained the same. For those who saw DC spending increases, approximately 40% saw 2016 DC spending up 11-25% y/y and ~20% seeing DC spending up more than 25% y/y.
2017 Increasing Flash in the Data center and a move to the Cloud; Negative for Storage? For 2017, almost 90% of respondents noting 25% or more of DC spending was on the Cloud. We believe with the cloud growing at a ~23% CAGR there are some challenges for storage, as the cloud drives almost 80% storage efficiency and offsets some of the demand from the local HDD storage, where efficiency is only ~30%, as noted from our call with industry expert Jim Handy. Also, 71% of respondents estimated that more than 25% of data center spend will be on flash SSD.
Key Data Center Flash Suppliers in July 2016; Legacy players getting stronger? When looking at flash suppliers, IBM is far and away the most
popular with over 75% of those surveyed noting they saw IBM as one of their most important players. SanDisk and Samsung were also recognized as key players in the market, garnering votes from 47% and 40% of respondents, respectively. IBM also came out on top as the company that was viewed as most innovative within the data center, with 64% of respondents, and Samsung as #2 in this segment with 60% of responders, while SanDisk rounded out the top 3 with 38%. We continue to see INTC, NVDA, and storage OEMs MU and WDC as key beneficiaries of the flash and cloud spending in the DC.
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