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The global network attached storage market size was USD 14.74 billion in 2019 and is projected to reach USD 54.57 billion by 2027, exhibiting a CAGR of 18.2% during the forecast period.
The adoption of NAS systems is primarily driven by the increasing deployment of hybrid cloud storage, growing demand for data backup and redundancy, higher data scalability, and manageability among others. The increasing usage of smart devices such as smartphones and laptops has led to the generation of huge volumes of data. This factor is likely to surge the demand for extended storage capabilities that would drive the market growth. These devices are likely to gain increasing popularity among the small and mid-sized businesses in the coming years.
Outbreak of COVID-19 to Uplift Demand for Network-Attached Storage Solutions Steadily
The spread of the novel coronavirus has hampered the business operations across several industries. Key providers are taking active steps to mitigate the economic impact of the COVID-19 pandemic on businesses. In the Seagate’s 2020 quarterly report, the company states that it shipped 120.2 exabytes of hard disk drive (HDD) storage capacity, which was less by 9.3% the HDD shipments in 2019. However, the average selling price has increased to USD 86.21. It is a 12.5% increase from 2019. Hence, the HDD revenue increased.
The above example shows that though the shipments are reduced due to the lockdown imposed by governments, globally, network attached storage companies are increasing the selling prices to balance the revenue. Seagate also states that hard disk drives are sold for large storage capacities including HDDs for nearline storage, several video applications including network-attached storage, and surveillance. Also, the work from home culture that has compelled employees and firms to store official data in these systems which, in turn, is another factor responsible behind the high demand for storage systems.
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NAS Systems to Gain Popularity among Small and Mid-Size Businesses across End-user Industries
NAS is gaining popularity among small and mid-sized businesses. It is like a personal cloud where users can easily access the data using a network connection. The servers help organizations to provide a tremendous competitive advantage, increase the level of customer service, and extend the collaborative reach. These systems are simple to operate, provide easy data backup, and facilitate easy data centralization safely and reliably. These factors would contribute to the adoption of these systems among organizations.
Increasing Requirement of Data Backup and Redundancy is a Current Trend
As the industries are going through digital transformation, data has become a crucial asset. Hence, there is an increasing need for data storage & backup from the end-use industries. Network attached storage (NAS) primarily provides shared and centralized storage for digital files. Multiple hard drives are incorporated in a single system.
The drives also offer extra backup potential. Many of the drives are available in the market with multiple disks which are termed as RAID configuration. A redundant array of independent disks (RAID) enables the data duplication function across multiple hard drives. These capabilities can satisfy the requirement for data backup and redundancy, which is expected to expand the global market size.
Rapid Deployment of Fifth-generation Wireless Technology to Foster Growth
Telecom service providers such as Ericsson, AT&T, Nokia, and Telefonica have begun to roll out 5G services. 5G's ability to connect millions of devices will drive the development of smart cities, factories, and smart agriculture. Also, many applications such as smart homes will be connected to the cloud which will generate a large amount of data.
Low-latency and ultra-reliable network of 5G would ensure to transform various industries such as critical infrastructure, real-time healthcare, and autonomous vehicles. These applications would require real-time processing and extended storage space. Hence, these factors are expected to contribute to the fact that the rapid deployment of 5G is likely to uplift the demand for these systems.
Increasing Number of Cyber-attacks to Impede Adoption of NAS
Data security and privacy remain significant factors for the adoption of network security. The increasing numbers of cyber-attacks are likely to restrict the market growth. For instance, in August 2019, Synology Inc. received reports from the users stating that the data from their systems were encrypted by ransomware.
However, an investigation report from Synology stated that the cyber-attacks were implemented using the brute force technique. Due to these attacks, the company collaborated with the Taiwan computer emergency response team/coordination center (TWCERT/CC). Through this collaboration, Synology aims to create awareness among all the users to reinforce security settings to safeguard the user data.
Solutions Segment to Exhibit High Share Backed by Need to Save & Share Data Files
Based on the component, the network attached storage market is divided into solutions and services. Solutions offered by market players include Synology Inc.’s FS series (FS3400), XS+/XS Series, and others; IBM’s NAS 100, NAS 200-25T; Western Digital Corporation’s My Cloud solution among others. These solutions enable individuals or enterprises to save and share data files from anywhere with an internet connection. Hence, the solutions segment is expected to demonstrate more demand from end-users.
The services segment comprises professional and managed services. Professional services including consulting, training and education, and maintenance are anticipated to hold major network attached storage market share. As users are more inclined towards cloud-enabled personal data storage solutions, the managed services sub-segment is expected to show a steady growth in the forthcoming years.
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Low-end Segment to Register Highest Growth Due to Rapidly Surging Amount of Data
Based on the product type, the market is classified into high-end/enterprise, mid-market, and low-end. The mid-market segment is forecast to hold the major market share. Oracle’s Sun ZFS Storage is a mid-market product. These products offer enhanced performance and efficiency for enterprise storage.
The low-end segment is projected to register the highest growth rate. These products are specifically designed for personal or home office use. IBM Corporation’s DS series is an example of the low-end product. As high end-enterprises generate enormous data they require large storage space hence due to high costs of the storage systems the high-end/enterprise segment is anticipated to showcase a steady growth rate
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Ability to Insert Additional Drives to Favor Growth of Scale-Up Segment
Based on storage solutions, the market for network attached storage is divided into scale-up and scale-out. In scale-up, additional drives could be added to an existing system. Owing to this feature, these solutions are set to showcase more demand.
The scale-out segment is estimated to foresee a significant growth rate during the forecast period. It facilitates superior performance, non-disruptive operations, and employs improved agility and efficiency. These factors are likely to drive the adoption of these solutions across the industries.
Cloud Segment to Demonstrate Increasing Demand from End-use Industries
Based on the deployment type, the market for network attached storage is divided into cloud and on premise. The cloud segment is likely to hold a major share during the forecast period. This is likely to occur as several market players are emphasizing particularly on cloud solutions. For instance, in July 2020, QNAP Systems, Inc. introduced a software-defined cloud native solution. The solution enables the cloud deployment through subscription. Similarly, Zyxel Communications Corp offers a personal cloud storage portfolio. These personal cloud solutions offer free access to data incorporated with media streaming capability.
The companies adopting on premise solutions have substantial investment in ICT infrastructure. However, the companies are shifting towards cloud-based solutions from on premise to run the business operations cost-effectively. As a result, the on premise segment is expected to exhibit a declining demand in the coming years.
Retail and E-commerce Segment to Dominate Stoked by Generation of Huge Customer Database
By end-user, the market has been categorized into banking, financial services and insurance (BFSI), healthcare, retail & e-commerce, IT & telecomm, automotive, and others (energy & utilities, media, and entertainment, government, etc.)
The retail and e-commerce industry is expected to emerge as the dominant segment in the global market. E-commerce has enabled customers to perform mobile banking activities which have generated a huge customer database. Also, owing to the technological advancements, retailers are thriving on information investing in machine learning (ML) and predictive analytics to extract meaningful insights. These factors are likely to drive the adoption of a robust and affordable storage system across the segment.
The immense data growth, budget margins, and the ever-changing regulatory demand would drive the need for scalable and cost-effective solutions across the BFSI industry. The deployment of NAS solutions makes it easier for financial institutions to store, protect, and access customer data.
In the current technology era, clinical workloads require storage infrastructure to quickly access clinical applications, electronic health reports, customer billing, and other factors. These are set to drive the need for extended storage space equipped with security. Similarly, the increasing adoption of wearables, bring-your-own-device (BYOD), and telemedicine is likely to support the growth of this segment.
Similarly, the telecommunication segment is exhibiting an explosive growth in data volumes due to the proliferation of over-the-top services incorporated with the evolution of smartphones. This is likely to support the growth of the segment in the near future.
North America Network Attached Storage Market Size, 2019 (USD Billion)
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By region, the market has been analyzed across five major regions, namely, North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America. North America is expected to hold a major market. The developed countries, such as the U.S. are expected to contribute to the market growth in North America.
Asia Pacific is anticipated to hold lucrative opportunities in the coming years. In July 2020, Google announced its plan to invest USD 10 billion in India through partnerships and equity investments to accelerate digitalization across the country. This shows that the region would open doors to new market opportunities for key companies. Similarly, China and Japan are expected to contribute a notable share in the regional market. The IT & telecom industry in the region is set to be the fastest-growing industry in Asia Pacific. The growing adoption of smartphones and the increasing internet penetration are some of the factors expected to support this market growth across the region.
Europe is expected to exhibit a significant growth during the forecast period. The BFSI sector in the region is anticipated to be a potential customer in the coming years. For instance, in July 2019, Hitachi Data Systems Corporation partnered with Santander Bank and Telefonica in developing 5G use cases for the banking industry in Europe. One of the use cases include 5G storage and low latency storage solution based on the Hitachi content platform.
The Middle East and Africa is expected to show moderate growth. Cloud deployment has been widely accepted by most of the enterprises across the region. As per Cisco Global Cloud Index (2013 – 2018), the region is projected to exhibit the maximum cloud traffic growth rate of 54%. The maximum cloud traffic growth can be attributed to mobile internet adoption and social media usage that continues to grow across the region.
Latin America is expected to show a steady growth rate during the forecast period. There is notable digitization across the key countries such as Brazil, Argentina, and Chile among others which means there is an availability of ICT infrastructure to support the market growth across the region.
Key players to Focus on Launching New Products to Increase their Shares
The network attached storage companies such as Synology Inc., Seagate Technology plc, Hitachi Data Systems Corporation and Western Digital Corporation are focusing on introducing new products as an effective business strategy. Introducing these products would enable businesses to strengthen their business plans, expand global reach, and cater to the demand from end-users. For instance:
An Infographic Representation of Network-Attached Storage Market
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The network attached storage market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. The market study also incorporates customized research on different aspects of the market. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.
2016 – 2027
2020 – 2027
2016 – 2018
Value (USD Billion)
By Product Type
By Storage Solution
Fortune Business Insights says that the global market size was USD 14.74 billion in 2019 and is projected to reach USD 54.57 billion by 2027.
In 2019, the North America market value stood at USD 5.60 billion.
Registering a CAGR of 18.2%, the market will exhibit steady growth in the forecast period (2020-2027).
The scale-out segment is expected to be the leading segment in this market during the forecast period.
The increasing deployment of fifth-generation wireless technology, industrial IoT, industry 4.0, smart factories, and robotics are the key factors driving the growth of the market.
Synology Inc., Dell Technologies Inc., HPE Company., Seagate technology public limited company, NetApp Inc., and Qnap System Inc. are some of the major players in the global market.
North America dominated the market in terms of share in 2019.
Asia Pacific is expected to exhibit the highest growth rate during the forecast period.
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