Virtualization and Cloud executives share their predictions for 2016.  Read them in this 8th Annual VMblog.com series exclusive.

Contributed by Tom Cook, CEO of Permabit Technology Corporation

Data efficiency technologies will dramatically help storage vendors overcome market deflation

1.       Affordable performance. The real and effective cost of flash continues to drop, driven by advances in hardware and data reduction software.  Open systems and commoditization promise all will benefit from the hardware changes as they have in the past.  Products that add Data Reduction (DRe) software to the mix will continue to be the ones that see the highest growth. Products that either don't have DRe, or that fail to deliver it with performance, will fail.

2.       Affordable agility.  Just as the cost of performance is dropping, the cost of delivering needed performance AND capacity on demand will drop as well, driven by a drop in storage costs both on premise and in the cloud.  Companies that implement end-to-end data reduction will have cost advantage when compared to those that don't - look for them to emerge as leaders.

3.       Affordable capacity.  Scale and commoditization will continue to drive down the cost of cloud storage, ensuring that the vast majority of organizations will have a cloud or hybrid storage strategy.  More applications will move to the cloud. This in turn will force traditional storage manufacturers to drop their costs due to competitive pressure.  Look for the traditional storage vendors to leverage DRe to compete with commoditization and scale, and look for the cloud vendors to fight back with the same.

4.       And the winners are? 

a.       Hyperscale cloud vendors continue to see growth - as do their suppliers. Look for providers to begin truly leveraging DRe in 2016, to drive down costs even further.

b.       High performance storage with integrated DRe continues to grow, while traditional disk storage continues to see a decline.  The high-performance market will see a shake out this year, as products without effective DRe fail to gain sufficient traction in the overall market.

c.       Software Defined Storage and converged appliance market (with direct attached storage) continues to grow. Commodity hardware and open source software (powered by Linux) will provide a solid foundation for growth rates of 35% in this sector, as more organizations than ever use SDS to adopt the same efficiencies as Amazon and Google in their On-Prem facilities and private clouds.

d.       Enterprise IT - is able to leverage reduced costs and increased agility to do more with less, staying on budget while meeting SLAs.  Look for many more new IT projects and initiatives coming out of the large organizations, some of these will have little effect on the bottom line, but some will be game changers!

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About the Author

Tom Cook, Chief Executive Officer and President, is responsible for guiding the company's strategy and vision. Cook has more than 20 years of experience leading growth stage technology companies. Prior to joining Permabit, Cook led and completed the sale of web application developer, Curl Corporation to a division of the Sumitomo Corporation. Prior to Curl, Cook was President and CEO of audio tool maker, Cakewalk Software (acquired by Roland Corporation), which he led from start-up to worldwide market leadership. He also served as a director of or advisor to more than a dozen companies and organizations.