EMEA Purpose-Built Backup Appliance Market Declines 6% in 4Q16

EMEA Purpose-Built Backup Appliance Market Declines 6% in 4Q16

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EMEA purpose-built backup appliance (PBBA) vendor revenues declined 6% year over year to reach $254 million in the fourth quarter of 2016, according to IDC's Worldwide Quarterly Purpose-Built Backup Appliance Tracker.

Capacity shipped for 4Q16 totaled 317PB, an increase of 19% from 4Q15. The growth mainly came from open systems products, with capacity increasing 25% year on year. Total EMEA PBBA open systems vendor revenue decreased 7% year over year during the quarter, with revenues of $230 million. Mainframe system sales increased 4% year over year in 4Q16.

"Companies' main objective when approaching the infrastructure refresh cycle is to save costs. Those companies that have decided to renew their disaster recovery solutions using backup appliances as the primary driver have done so due to the benefits that PBBA provides them in terms of controlling expenditure, as they can extend organizations' existing investment and data protection hardware and software without having to change," said Jimena Sisa, senior analyst, European storage research.

Although many economies in Western Europe declined in 4Q16, emerging markets, mainly in Central and Eastern Europe, saw healthy growth in the PBBA market, increasing 13% year on year in vendor revenue.

EMEA PBBA Vendor Revenue by Product, 4Q16 (Revenues in $M)

Vendor Revenues ($M)

4Q15 Revenue

4Q15 Market Share

4Q16 Revenue

4Q16 Market Share

4Q16/4Q15 Growth

Mainframe systems

$23.3

8.61%

$24.3

9.55%

4.12%

Open systems

$247.3

91.39%

$229.8

90.45%

-7.09%

Total

$270.6

100.00%

$254.0

100.00%

-6.12%

Open Systems

Vendor Revenues ($M)

4Q15 Revenue

4Q15 Market Share

4Q16 Revenue

4Q16 Market Share

4Q16/4Q15 Growth

Integrated system

$85.6

34.60%

$96.4

41.96%

12.68%

Target system

$161.8

65.40%

$133.4

58.04%

-17.55%

Grand total

$247.3

100.00%

$229.8

100.00%

-7.09%

Vendor revenue in Western Europe was down 2% year on year in 4Q16 to $195 million, while capacity increased 21% year on year to 151PB. "Although the economic and political turmoil is still impacting consumer confidence, delaying modernization investment projects and negatively affecting the PBBA market in some Western European economies, there are other countries where PBBA spending increased, such as Germany at 30% YoY and France at 20% YoY. The implementation of the General Data Protection Regulation, or GDPR, should force organizations to reinforce or restructure their data protection solutions," Sisa said.

Countries in Central and Eastern Europe, the Middle East, and Africa (CEMA) continued to see a recovery in the market from the previous quarter. The PBBA market in CEMA declined by 16.5% YoY, compared with 32.3% YoY in 4Q15. "In fact, we see two opposite trends in CEMA," said Kostadin Kostadinov, research analyst, IDC CEMA. "While PBBA in Central and Eastern Europe [CEE] is growing each quarter in double digits, the Middle East and Africa [MEA] is declining twice as fast."

The main drivers of the PBBA market are procurements from scientific and government institutions, the banking and telecom sectors, and the midmarket. GDPR, country data regulations, product bundles, and richer data services were the main drivers of market growth in CEE. The complicated political and civil situation in MEA, however, was still a major obstacle for the business climate and PBBA spending in the region.

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