Backlog Release, DX Investment, and Increasing Ransomware Attacks Boosted the EMEA Storage Market in 2022, Says IDC

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For more information, contact:

• Jaroslaw Smulski  Email: jsmulski@idc.com  Phone number: +48 883 376 083
• Yana Frolova  Email: yfrolova@idc.com  Phone number: +420 2 2142 3140

PRAGUE, May 18, 2023 — The negative impact of the war in Ukraine on the macroeconomic situation in Europe did not stop the rapid growth of the enterprise storage systems (ESS) market in the fourth quarter of 2022. On the contrary — the growing uncertainty in the market and the increase in the number of cyberattacks have forced many organizations to accelerate investments in building a stable, scalable, and secure data storage platform.

The storage market in Europe, the Middle East, and Africa (EMEA) grew by 8.3% in Q4 2022, but this growth was not evenly distributed across sub-regions, according to the Quarterly Enterprise Infrastructure Tracker published by International Data Corporation (IDC). In Western Europe (WE), which benefited from the backlog release and strong digital transformation trend, the market grew by 19.4%. The war between Russia and Ukraine caused a dramatic drop in the value of both markets, and thus the value of the market in Central and Eastern Europe (CEE) dropped by 53.5%. Finally, the countries of the Middle East and Africa (MEA) benefited from high oil prices, which resulted in large funds for public and commercial IT investments, thus speeding up the implementation of digital transformation strategies in some countries, such as the UAE Strategy for Government Services or Vision 2030 in Saudi Arabia. As a result, the value of the MEA storage market increased by 34.3% year on year in Q4.

"The marked improvement in storage supply chains and the strong trend of building a data-driven economy accelerated since the pandemic, with a simultaneous increase in ransomware attacks. This has clearly moved storage investments higher on the priority list of many CIOs," says Jarek Smulski, senior program managers with IDC Systems & Infrastructure Solutions. "In addition, the need to reduce electricity consumption and build more sustainable datacenters has boosted the trend of replacing existing arrays with more energy-efficient all-flash arrays."

The results in the fourth quarter only confirmed the strong upward trend that started in the second quarter of 2022. The overall EMEA region storage market value increased by 10.3% and, similarly to the fourth quarter, it posted significant increases in the WE and MEA countries — 17.5% and 27.4%, respectively — but an equally significant decline in the CEE region of 41.5%. The decline was due to the ongoing geopolitical conflict, in the absence of which the market was estimated to post growth of 24.1%.

Organizations in EMEA have been particularly affected by the conflict in Ukraine and have had to quickly adapt to skyrocketing energy prices, repeatedly disrupted supply chains, and an increase in cyberthreats. This also had an impact on IT spending by governments in this region to better secure critical infrastructure from Russian hackers.

The relatively good macroeconomic situation at the turn of 2022-2023 suggests that the recessionary impact on IT budgets will become apparent in the second half of 2023. In addition to a strong base in 2022, this will result in the ESS market decreasing year on year by nearly 5% in 2023. These factors will also affect the five-year compound annual growth rate (CAGR), which is estimated at 2.1% for the entire EMEA region. The prolonged war in Ukraine and high prices of commodities, as well as large investments made in 2022, will translate into a reduction in storage spending in the short term (i.e., year on year in 2023). In the longer term, the growing importance of AI/ML workloads, the development of edge computing, growing data volumes, will and the modernization of storage infrastructure will positively impact storage investments.

About IDC's Worldwide Quarterly Enterprise Infrastructure Tracker

IDC's Worldwide Quarterly Enterprise Infrastructure Tracker presents a total addressable market view for the enterprise infrastructure technologies (server, external enterprise storage systems, and purpose-built appliances: HCI appliances and PBBA) for market size, market share, and forecast while providing detailed segmentation of each individual enterprise infrastructure technology market.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading tech media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.

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