Rajat Kharbanda, Senior Consultant, 6Wresearch
India has become one of the key potential markets for next-generation storage devices globally. Increasing volume of data, rising number of wireless devices, booming cloud market, and need for 24*7 surveillance have led to the penetration of network-attached storage (NAS) devices in the country.
Though NAS devices are popular in large enterprises, but in the last few years demand for these has surged in SME market as well. Launch of cost-effective and entry-level NAS has driven the growth of the market in SME end-user segment.
According to 6Wresearch, India NAS market is projected to reach USD 89 million (up to 24 bay) by 2022. Amongst 1–24 bay NAS types, 2- and 4-bay NAS have captured key share of the market pie in SME end-user segment. Companies such as QNAP, NETGEAR, D-Link, and Seagate are the major players in this segment market.
Although the revenue share of 1-bay NAS is negligible in the overall market, however, in-terms of overall volume, the segment recorded sales of more than 5000 units in the year 2015. Extensive usage of external/portable hard disks and flash memories has restricted the growth of 1-bay segment in Indian market.
However, in the coming years, revenue share of 1-bay segment is expected to increase marginally, especially due to its adoption in home/SOHO market. Players such as Western Digital and Seagate have dominated the market in 1-bay segment. Western Digital has acquired majority of the market share by selling its MyCloud Series models in the country.
Amongst all end users, SME segment has captured majority of the revenue share in India’s overall NAS devices market. Low penetration of NAS devices in home end-user segment is due to low awareness and increasing usage of hard drives and flash drives to store the data.
Over the next six years, the growth of overall market would also be dependent on rising IT infrastructure and spending. India’s IT spending reached USD 73.3 billion in 2015 and is anticipated to touch approximately USD 116 billion by 2022, growing at a CAGR of 7 percent during 2016–22. IT spending in India is increasing as a result of growing business need, need for data management, and acceptance of digital platform in the country.
The top five sectors, which would drive heavy investments into IT over the next six years, are, namely, manufacturing and natural resources, communications, media and services, government, banking and securities, and retail. The government sector is emerging as the fastest-growing IT spender in the country.
In 2015, small and medium enterprises reached 2.4 million units in the country. The steady growth of SME sector is due to rising VC support in this area, government initiatives, and encouragement of sustained business environment.
In India, SMEs are likely to spend on IT products that include mobility, analytics, social media, and cloud in order to increase their customer reach, manage customer relationships, and ensure efficiency and continuity in the operations. These factors would drive the penetration of NAS in India’s SME sector.
NAS are primarily imported in the country due to the lack of domestic manufacturing facilities. In 2015, imports contributed 100 percent of the market volume for NAS. However, over the forecast period, QNAP is likely to start assembling NAS devices in the next 3–4 years. This would result into declining of the prices, which would spur the adoption, especially in SME sector in India.
The major challenge the market is witnessing is low awareness amongst consumers due to lack of knowledge of the product and lower promotional activities. Further, complexity involved with the network-based solutions and simplicity to use hard drives for storage and backup purposes are some of the prime factors responsible for lower NAS demand, primarily in SME sector.
The players offering NAS systems in India should organize events and roadshows to extend the awareness amongst end-user community. Further, players should focus heavily on strengthening the technical support network across the country to cater to the pre-sales and after-sales technical support and queries and guidance related to the technicality of NAS solutions in India.