Memory shortage drives external enterprise revenue up

The worldwide external OEM enterprise storage systems (ESS) market continued its sharp acceleration in the second quarter of 2026, reaching $10,3-billion in vendor revenue, a 33,6% year-over-year increase, according to IDC’s Worldwide Quarterly Enterprise Storage Systems Tracker.

This represents the second-highest quarterly total in the tracker’s history, trailing only Q4 2025, and the highest revenue ever recorded outside a fourth-quarter period.

ESS growth accelerated further from the 28,7% rate posted in the first quarter of 2026, marking a second consecutive quarter of acceleration after the market’s 3,9% full-year 2025 growth rate.

Three reinforcing dynamics continue to drive the market.

• IDC’s tracker data and channel checks point to a demand-pull effect layered on top of genuine refresh and AI-driven demand: buyers increasingly appear to be pulling storage purchases forward to secure budget and configurations ahead of further anticipated component price increases, rather than simply absorbing price after the fact.
• The component price increase impacted the market across all segments, including all-flash, hybrid, and HDD-only systems, boosting system prices. As a result, customers were able to buy less storage capacity while paying more.
• The multi-year deferred infrastructure refresh cycle, postponed while server and AI compute spending took priority in 2024 and 2025, is now flowing through in force, particularly at the high-end market.

The root cause remains component supply, where NAND and DRAM production capacity continues to be prioritised toward higher-margin memory products, with SSD pricing particularly affected, IDC does not expect any meaningful relief before 2028. Compounding these pressures are tighter IT budgets resulting in enterprises buying storage in advance of anticipated price increases.

Key Tracker findings include:

• +33.6% year-over-year growth in vendor revenue in 2Q26, reaching $10,3-billion, compared to $7,7-billion in 2Q25, an acceleration from 1Q26’s 28,7% growth rate.
• All Flash Arrays (AFA) extended their majority position, generating $5,4-billion (+42,9% YoY) and representing 52,1% of total ESS revenue. Hybrid Flash Arrays (HFA) grew 25,5% YoY to $3,9-billion (37,5% share), while all HDD arrays grew 22,6% to $1,1-billion (10,4% share).
• High-end systems (priced above $250 000 ASP) surged 90,6% YoY to $2,7-billion, now representing 26,2% of the market, driven by large-scale AI infrastructure storage deployments. Midrange systems ($25 000 to $250 000) grew 28,2% to $6,7-billion (64,8% share), while Entry systems (<$25 000) declined 14,6% to $0,9-billion.
• First-half 2026 revenue reached $29,6-billion, up 28,2% YoY from $15,3-billion in 1H25, eight times the 3,9% growth rate recorded for full-year 2025.
• Top three fastest-growing regions: Canada (+77,2%), APeJC (+73,1%), and Central & Eastern Europe (+54,1%), alongside strong performance from the dominant US market (+26,8%, $3,6-billion, 35,3% share). All nine tracked regions posted year-over-year growth, with Japan posting the slowest gain at +12,9% YoY.

AI deployment demands

The deferred refresh cycle that took a back seat to server and AI infrastructure spending in 2024-2025 is now flowing through in force, particularly in high-end segments where refresh economics are most acute.

High-end storage (systems priced above $250 000) surged 90,6% year over year in 2Q26, an acceleration from the 60,7% growth recorded in 1Q26. This represents the sharpest segment acceleration in the market.

The combination of pricing-driven and refresh-driven demand is expected to sustain above-historical-average growth rates through the remainder of 2026, even as volume growth remains constrained by supply availability.

Storage also remains central to enterprise AI deployment. All-flash platforms built for GPU-to-storage bandwidth requirements in AI training and inferencing remain among the fastest-growing product categories IDC tracks, with demand increasingly extending beyond GPU-server-attached capacity into unstructured and multimodal data activation use cases.

Subscription and as-a-service storage models continue to gain traction for AI infrastructure buildouts, even as capital purchases of owned hardware grow faster in the current upcycle.

“Over the past two years, storage has taken a back seat to compute. Enterprises poured their budgets into accelerated server infrastructure to get AI training off the ground, and storage spending grew at a fraction of that pace,” says Natalya Yezhkova, vice-president: storage and data management, enterprise infrastructure at IDC. “That balance is shifting. As AI moves from training to inferencing, the bottleneck isn’t just computing resources anymore, it’s how quickly and broadly organisations can put their data estates to work.”

“At the same time, storage systems are getting more expensive, and few customers have the luxury of waiting out the price cycle: the data must be accessible now. Those two forces together are what’s pushing the storage market back into growth.

“We expect component costs to remain elevated well into 2027, keeping pricing-driven growth in place even as the market’s underlying demand signals, from unstructured data growth to inferencing workloads to a deferred multi-year refresh cycle, continue to play out,” Yezhkova adds.

Regional market results

Regional performance in 2Q26 was broadly positive, with all nine tracked regions posting year-over-year revenue growth. The US remained the dominant market, generating $3,6-billion (+26,8% YoY) and representing 35,3% of global ESS revenue.

Canada was the fastest-growing region at +77,2% YoY ($239,6-million), followed by APeJC (+73,1% YoY, $1,1-billion) and Central & Eastern Europe (+54,1% YoY, $240,4-million). Latin America (+48%) and Middle East & Africa (+35,1%) also posted strong gains.

Western Europe grew 42,8% YoY to $1,9-billion, remaining the second-largest region worldwide.

PRC grew 20,7% YoY to $2,2-billion, while Japan posted the market’s slowest growth at +12,9% YoY ($302,6-million).

Market standings by company

Dell Technologies retained the top position in 2Q26, with a 23,8% revenue share and 42,5% YoY growth, extending the more than 3-point year-over-year share gain it posted in 1Q26 on the strength of its broad portfolio and AI storage attach strategy.

Huawei moved into second place with an 11,3% share, up 29,4% YoY.

NetApp held third position with a 9,6% share and 35,7% YoY growth, underpinned by its growing all-flash business.

Everpure placed fourth with 8,1% share but posted the fastest growth of any top-five vendor at +50% YoY, driven by continued subscription model adoption and AI-optimized platforms.

Hewlett Packard Enterprise rounded out the top five with a 6,8% share and 31,9% growth.

Company 2Q26 Revenue 2Q26 Share 2Q25 Revenue 2Q25 Share YoY Growth 1. Dell Technologies $2,458.7M 23.8% $1,724.8M 22.3% +42.5% 2. Huawei $1,168.9M 11.3% $903.5M 11.7% +29.4% 3. NetApp $988.4M 9.6% $728.5M 9.4% +35.7% 4. Everpure $837.7M 8.1% $558.4M 7.2% +50.0% 5. Hewlett Packard Enterprise $700.2M 6.8% $530.9M 6.9% +31.9% Rest of Market $4,187.5M 40.5% $3,291.6M 42.5% +27.2% Total $10,341.5M 100.0% $7,737.9M 100.0% +33.6%

Top 5 Companies — Worldwide External Enterprise Storage Systems Market, 2Q26 (Vendor Revenue in US$ millions); Source: IDC Worldwide Quarterly Enterprise Storage Systems Tracker, September 10, 2026.

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