Toshiba Emerges With Major Storage Market Share Gains In 2016 Challenging WD And Seagate

toshiba RD
When it comes to the global computer storage market, it appears that Toshiba is demonstrating strong gains in a sector that is dominated by the likes of bellwethers like Seagate and Western Digital, which appeared previously to be the last standing competitors in an arena with heavy consolidation. However, not only was Toshiba the fastest growing vendor for hard disk drive (HDDs), but it also showed stronger gains than its larger competitors in the solid-state drive (SSD) sector during 2016.

Toshiba showed a 9-percentage point growth during Q4 2016 in the HDD sector, and increased its revenue share in all key storage product sectors. Toshiba’s unit share of the overall HDD market has increased to 24 percent globally, putting it in third place behind second-place Seagate and first-place Western Digital. Toshiba’s revenue share, compared to its unit share, however, falls a bit behind that pace at 18.8 percent. Seagate and Western Digital’s numbers more closely match their unit share.

HDD Drive Shipments and Revenue Source IDC

Likewise, Toshiba witnessed an impressive 114 percent year-over-year revenue increase in the SSD segment, and its revenue share stands at 8.5 percent, putting in fourth place behind Samsung, Western Digital, and Intel.

The above figures come from IDC, which has released a comprehensive report on the global storage market spanning a number of years as well as Q4 2016 finals.

SSD Vendor Revenue Shapshot Q4 Source IDC

"With successful launches of new HDD and SSD products over the next few quarters to address demand from cloud service providers and the traditional IT market, Toshiba should be well positioned to sustain further HDD and SSD revenue growth in 2017,” said John Rydning and Jeff Janukowicz, research vice presidents at IDC.

Given Toshiba’s recent gains in the storage market, we wanted to get some insight direct from the company. We reached out to Steve Fingerhut, Senior Vice President and General Manager for Toshiba's SSD and HDD business units, for some further insight into the what happened during the lead-up to Q4 this year... 

IDC’s report shows huge growth in your HDD and SSD businesses, in terms of revenue and unit shipments, and puts Toshiba HDD market share at 24% with Toshiba 4th in SSD market share.  Do you expect to increase market share moving forward?  

Toshiba saw significant growth mainly in traditional segments – client and enterprise – for both HDD and SSD.  We also gained share in Business Critical, High Capacity Nearline HDDs and enterprise SATA SSDs which tend to be more relevant to datacenters, however, this area was less of a contributor to our overall storage growth.  Since our datacenter-focused product offerings will continue to expand over 2017-18, we expect to see further growth in this segment in the future.

What’s Toshiba’s current share percentage in SSD?

Toshiba finished 2016 at 8.5% revenue share in Q416, placing us in the 4th share position in SSDs.  That is nearly double our share position from Q415.

Which market areas showed the strongest growth for Toshiba – Enterprise, Data Center, or Client?

We grew in all segments, with client and enterprise as the fastest growing.  With our future Nearline HDD rolling out and higher capacity helium-filled drives in development, we expect to keep the momentum going for HDD growth in the coming quarters.  In mid 2015, we formed a new R&D team dedicated to cloud datacenter solutions here in the US. Since the team is based in the US, we were able to leverage the talent here, as well strategically locate them close to our key customers to drive even greater cooperation, optimizing our solutions to address specific storage challenges that our partners face. This team has ramped up quickly and will start rolling out products designed for the cloud datacenter later this year which will help fuel further growth.

Which of Toshiba’s SSD and HDD products performed best in the market? Did they exceed expectations or was the company anticipating such a strong uptick?  

We expected a strong year, but our growth in 2016 exceeded our expectations.  We have a very robust product lineup, but this success wasn’t just about products.  We changed the way we do business and started a new approach with each customer to align our way of operating to their business needs.  This approach started at the executive level and extended across all working teams.  We are proud and thankful for the strength of our customer relationships – they are the foundation of Toshiba’s success.

Was there a market trend that aligned well with Toshiba’s strength that may have caused this surge?

The traditional segments of client and enterprise are mature and both customers and suppliers are still consolidating.  OEM system integrators prefer to deal with fewer vendors, but ones with more to offer.  Consequentially, Toshiba’s broad storage portfolio of both HDDs and SSDs is very attractive as customers can standardize on one support team, one supply chain team, and one business team for all of their storage needs.  Once all of those teams aligned well with our customers’ teams, we experienced rapid growth.

Can you provide any insight into Toshiba’s strategy moving forward to potentially continue such strong growth in Storage?

We plan to continue executing in the client and enterprise segments; they are still very large and important parts of the market. Our growth will come from expansion in the cloud datacenters – including the few large-scale datacenters, the broad base of mid-sized and small datacenters, as well as traditional enterprise IT departments which are adopting private cloud architectures more and more.  We have a strong product portfolio for increasingly pervasive cloud architectures, including high capacity HDDs for big data storage and PCIe and SATA SSDs for high performance access to hot data.

How is Toshiba’s approach unique?

At the heart of Toshiba’s storage strategy is a focus on driving innovation. Toshiba invented NAND which is a core technology driving storage transformation in the IT industry and enabling entirely new products and companies. Toshiba’s flash products make everything possible from smart phones to drones to fast datacenter storage. We are continuing to invest in our storage technologies, everything from the next generation of Nearline HDDs to proprietary controllers and firmware for SSDs. This focus has been a massive success for Toshiba and we have worked to expand that innovative DNA across all product lines.  We also changed how we do business.

We have one of the broadest portfolios in the industry - that level of investment was a strategic decision by Toshiba that enabled us to be a key partner to our customers.  And culturally, we fused the best from both Japanese and US business styles. We take the long-term view, but we act fast.  We care about relationships and trust.  We do what we say and don’t exploit short term gaps, demonstrating our commitment to strategic long term partnerships. Our customers value this combination of technology and business innovation which led to our strong growth in 2016. We expect Toshiba’s unique approach to continue and even accelerate this momentum into 2017 and beyond.

Thanks to Steve Fingerhut for taking the time to answer our questions. We look forward to hearing more updates on Toshiba's efforts storage in the year ahead.

Image source credit : Chiether/Wikimedia Commons

Tags:  SSD, HDD, Storage, Toshiba