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Enterprise Storage Market Grows Modestly in Q3 2025 as AI Drives Shift to Flash, IDC Says
2025-12-15
The global external enterprise storage systems market recorded modest growth in the third quarter of 2025, reflecting steady demand for flash-based platforms even as traditional storage segments continued to decline, according to new data from International Data Corporation (IDC).
IDC’s Worldwide Quarterly Enterprise Storage Systems Tracker shows that external OEM enterprise storage systems revenue rose 2.1% year over year to $8.0 billion in the quarter. While the growth rate remains subdued compared with the server market’s rapid expansion, analysts say it underscores a structural shift toward flash storage driven by artificial intelligence workloads entering corporate data centers.
All-flash arrays emerged as the primary growth engine for the market, with revenue climbing 17.6% year over year. In contrast, hybrid flash arrays and hard disk drive–based systems continued to lose ground, declining 9.8% and 6.3%, respectively. IDC said enterprises are increasingly prioritizing storage platforms capable of supporting AI training and inferencing, which demand higher performance and lower latency.
Juan Seminara, research director for IDC’s Worldwide Enterprise Infrastructure Trackers, said the growing penetration of AI-infused applications is reshaping storage requirements. He noted that demand for flash storage is expected to accelerate as organizations deploy AI models more broadly across production environments.
By price segment, midrange systems—defined as platforms with average selling prices between $25,000 and $250,000—posted the strongest performance. The segment grew 8.1% in the quarter and now accounts for 67.5% of total external storage revenue. High-end systems declined 9.0%, while entry-level platforms priced below $25,000 fell 8.0%, highlighting pressure on both ends of the market.
Regional performance varied widely. Japan, Canada, and EMEA delivered double-digit growth of 14.4%, 12.6%, and 10.5%, respectively. China and the Asia-Pacific region excluding Japan and China posted high single-digit growth, while Latin America recorded a slight 0.9% decline. The U.S. market stood out as the weakest region, with revenue falling 9.9% year over year, reflecting softer OEM demand.
Dell Technologies retained its lead in the external enterprise storage market with a 22.7% revenue share, despite posting a single-digit decline. Huawei moved into second place with 12.0% share, supported by strong momentum in the Chinese market. NetApp ranked third with 9.4%, aided by solid performance in all-flash arrays, followed by Pure Storage at 6.8%, which delivered double-digit growth. Hewlett Packard Enterprise rounded out the top five with a 5.6% share.
IDC said the enterprise storage market is likely to remain under pressure relative to servers but expects flash adoption to continue rising as AI-driven infrastructure investments reshape enterprise data center architectures.
IDC’s Worldwide Quarterly Enterprise Storage Systems Tracker shows that external OEM enterprise storage systems revenue rose 2.1% year over year to $8.0 billion in the quarter. While the growth rate remains subdued compared with the server market’s rapid expansion, analysts say it underscores a structural shift toward flash storage driven by artificial intelligence workloads entering corporate data centers.
All-flash arrays emerged as the primary growth engine for the market, with revenue climbing 17.6% year over year. In contrast, hybrid flash arrays and hard disk drive–based systems continued to lose ground, declining 9.8% and 6.3%, respectively. IDC said enterprises are increasingly prioritizing storage platforms capable of supporting AI training and inferencing, which demand higher performance and lower latency.
Juan Seminara, research director for IDC’s Worldwide Enterprise Infrastructure Trackers, said the growing penetration of AI-infused applications is reshaping storage requirements. He noted that demand for flash storage is expected to accelerate as organizations deploy AI models more broadly across production environments.
By price segment, midrange systems—defined as platforms with average selling prices between $25,000 and $250,000—posted the strongest performance. The segment grew 8.1% in the quarter and now accounts for 67.5% of total external storage revenue. High-end systems declined 9.0%, while entry-level platforms priced below $25,000 fell 8.0%, highlighting pressure on both ends of the market.
Regional performance varied widely. Japan, Canada, and EMEA delivered double-digit growth of 14.4%, 12.6%, and 10.5%, respectively. China and the Asia-Pacific region excluding Japan and China posted high single-digit growth, while Latin America recorded a slight 0.9% decline. The U.S. market stood out as the weakest region, with revenue falling 9.9% year over year, reflecting softer OEM demand.
Dell Technologies retained its lead in the external enterprise storage market with a 22.7% revenue share, despite posting a single-digit decline. Huawei moved into second place with 12.0% share, supported by strong momentum in the Chinese market. NetApp ranked third with 9.4%, aided by solid performance in all-flash arrays, followed by Pure Storage at 6.8%, which delivered double-digit growth. Hewlett Packard Enterprise rounded out the top five with a 5.6% share.
IDC said the enterprise storage market is likely to remain under pressure relative to servers but expects flash adoption to continue rising as AI-driven infrastructure investments reshape enterprise data center architectures.
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