Text: Digital Intelligence Frontline Zhou Xiangyue
In recent months, large and small AI conferences have been held in full swing, and in addition to the topics of large models and computing power, an interesting phenomenon is that storage manufacturers are also very active. On the front side, Huawei just announced new AI storage and all-flash storage at the Full Connectivity Conference, and on the second side, Sugon Storage proposed to "build an advanced storage power center" at the 2024 Data Storage and Computing Ecosystem Conference......
Since the beginning of this year, with the dual blessing of the landing tide of AI large models and the construction of intelligent computing centers, what are the new changes and new progress in the old market of storage, which has existed for decades?
Recently, through the Chinese government procurement network platform, the digital intelligence front has completely sorted out the bidding situation of domestic storage projects in the first eight months of 2024, and has seen some characteristics of the storage market. To get the complete information of 375 storage items (some including contact information), please leave a message in the background.
01 Over 375 projects, with operators contributing the largest single
Different from the large model and intelligent computing center project that broke out in the last two years, the procurement of storage is a large base and a relatively mature market, just the Chinese government online that we focus on statistics, the purchasers are mainly from the government and public utilities such as science, education, culture and health, and there are at least 375 pieces of relevant bidding information in 8 months, and are widely distributed in various cities across the country.
In addition, there are hundreds of projects on other publicly available and statistical channels, mainly involving finance, manufacturing, energy, operators, transportation, etc. In the future, we will conduct special statistics for these industries.
From the perspective of the main procurement targets, these projects are often not always the separate procurement of storage equipment, but also include the supporting procurement of switches, networks, servers, etc., as well as storage expansion, maintenance and other related projects.
In terms of the amount of winning bids, except for the large-scale centralized procurement projects of operators, the amount of most projects is generally not large, ranging from hundreds of thousands of yuan to several million yuan.
Among the more than 375 projects that are not fully counted by the Digital Intelligence Frontline, only 11 projects have won bids of more than 10 million yuan, and the top three projects are all operator bidding projects.
China Telecom and China Mobile have carried out large-scale storage purchases this year. For example, the "2023 Edge Cloud Distributed Storage Framework Procurement of China Telecom Guangdong Branch", which was jointly won by Huawei and Qunding Technology, is worth about 100 million yuan.
In the first eight months of 2024, the project with the largest winning bid amount is the distributed storage centralized procurement project tendered by China Mobile, with a total value of more than 200 million yuan; Among them, Package 1 (Distributed File Storage - High-Performance Classic) was won by Huawei and ZTE. Standard Package 2 (Distributed Block Storage - Performance Classic) was won by ZTE, Sugon, and Huawei.
According to industry observations, although the mobile headquarters conducts large-scale centralized procurement of distributed storage products every year, compared with last year, the number of purchases and budgets this year have increased.
In addition to operators, hospitals, governments, culture, education and other industries have also emerged projects of more than 10 million yuan, mainly to purchase high-end storage equipment, or to cooperate with the synchronous procurement of servers and switches. For example, in the PACS computing and storage procurement project of West China Hospital of Sichuan University, the price of a single all-flash storage and object storage reached more than 2 million yuan and more than 1 million yuan respectively.
02 In government affairs and public utilities, medical procurement exceeds 40%.
According to the incomplete statistics of the Digital Intelligence Front from the Chinese government procurement network, among the government and public utilities, medical care, government, and education are the industries with the most orders, contributing more than 4 percent, more than 3 percent, and more than 1 percent of the number of projects, respectively.
Especially in the medical field, 135 large and small hospitals from all over the country have completed the bidding for more than 160 storage-related projects, many of which belong to storage expansion projects such as HIS and PACS. "The demand for medical cloud is continuing to drive the industry's procurement of storage." A senior industry source told Digital Intelligence Frontier that at present, the policy drive of medical cloud investment is more obvious, and in addition to large tertiary hospitals, a large number of small and medium-sized medical institutions are also accelerating the upload of medical data.
In addition, it is worth mentioning that more hyper-converged storage system projects are emerging in the storage procurement of hospitals.
In the past, the medical industry often had to divide into two large basic suppliers when buying cloud and storage, and medical users' own O&M personnel were required to coordinate the docking and debugging of the platform. The hyper-converged system has a virtualization function, which can achieve "out-of-the-box use" compared to the previous way of purchasing virtualization platforms/software and hardware devices separately. For some users, hyper-convergence allows users to obtain computing power, storage power, and cloud platform management capabilities at the same time faster, so it is favored in industrial cloud fields such as medical cloud.
As the projects collected online by the Chinese government are mainly projects of the government, science, education, culture and health and other public institutions, it also involves some bid-winning projects in the fields of finance, transportation, energy and other fields. For example, the "2023 Rural Credit Bank Storage System Old Equipment Replacement Procurement Project" of the Rural Credit Bank Fund Clearing Center, worth 6.1 million yuan; Xinjiang Production and Construction Corps Petroleum Co., Ltd.'s "server storage procurement project" is worth 783,600 yuan, and the procurement requirements include specific products such as distributed storage, storage network switches, virtualization management software, server memory modules and server network cards.
According to the observation of industry insiders, after a relatively strong procurement cycle from 2022 to the first half of 2023, the financial industry's storage procurement efforts this year have declined slightly.
It is undeniable that the manufacturing industry is also a major purchaser in the storage market this year. Yang Yunxu, research manager of IDC China, told Digital Intelligence Frontier that the procurement demand of the manufacturing industry has continued from 23 years to the present, whether it is internal circulation or global supply, and the manufacturing industry is recovering procurement demand. For example, food manufacturing companies such as Yili Group, automobile manufacturers such as BYD, and footwear and clothing manufacturers all have stable procurement needs for storage systems.
"Procurement needs in the manufacturing industry are gradually shifting to distributed systems." Yang Yunxu said that taking automobile manufacturing as an example, the core or AI application-related business still has a stable procurement demand for high-end all-flash memory, and the procurement demand for distributed storage solutions in smart parks and industrial control systems has increased, while the demand for production data security and compliance satisfaction will be directed to backup systems.
"In the first half of 2024, China's enterprise storage market has demonstrated unpredicted high growth." Yang Yunxu, research manager of IDC China, told Digital Intelligence Frontline. One of the major growth drivers comes from the recovery of the domestic market's internal circulation, and manufacturing, transportation, big government, telecommunications and other industries have seen a significant increase in storage procurement demand.
03 The head effect is obvious, and the localization of storage is further accelerated
In the first eight months of 2024, although the specific winning bidders cover a wide range and diversity, from the perspective of the brands involved in the final target, there is an obvious head effect.
The frequency of storage products from foreign manufacturers such as Dell, HP, and IBM is still not low. In particular, Dell has at least 10 projects that include Dell's related storage products in the final transaction bids.
However, compared with foreign brands, in the past one or two years, the trend of storage localization is becoming more obvious. Domestic brands such as Huawei, Xinhua III, Inspur Information, Sugon, Lenovo, ZTE, and Sangfor have occupied the mainstream.
For example, Huawei, with "Huawei Technologies Co., Ltd." as the main bidder, has won at least 11 projects, and these projects are tendered by the three major operators of China Telecom, China Mobile, and China Unicom. Among the three projects with the highest amount (the winning bid amount is more than 80 million yuan), Huawei is also involved. In addition, there are more than 50 storage projects involving Huawei-related products.
Huawei's public data also provides proof from the side. In the first half of 2024, Huawei's data storage business revenue in the commercial market increased by 75% year-on-year, the number of partners increased by 37%, and the number of customers increased by 49%. According to industry insiders, Huawei is currently vigorously promoting the "inclusive flash memory" work, which is expected to allow it to accumulate more product advantages in the small and medium-sized customer market.
Inspur Information, Xinhua III, Dawning, Lenovo, ZTE, etc. have also won large bids by themselves, or appeared in the procurement lists of many projects.
For example, the "Inner Mongolia Radio and Television Station Whole Station Program Production and Broadcasting System (Basic Resource Platform) Project" worth 12.74 million yuan was directly won by New H3C Technology Co., Ltd., and the procurement targets included active-active storage, distributed storage, storage access switches and many other products. ZTE, Sugon, and Xinhua III also directly won the bid for two large-scale centralized procurement projects worth more than 80 million yuan from China Mobile.
"The application of localized components is driving a new round of procurement, and the deployment of ARM-based products and other components of X86 is in obvious demand." Yang Yunxu, research manager of IDC China, told Digital Intelligence Frontier that this is also one of the main driving forces for the storage market to experience unexpected high growth in the first half of this year.
04 All-flash memory has become the choice of more users
Since the beginning of this year, the accelerated implementation of AI large models and the construction boom of intelligent computing centers are putting forward new requirements for storage, including leading infrastructure companies such as Huawei, H3C, Inspur Information, and Sugon, as well as cloud vendors such as Alibaba Cloud, Tencent Cloud, and Baidu Intelligent Cloud, all of which are optimizing and improving the performance of storage products in terms of high performance, multi-protocol, customizability, and high security.
In this context, all-flash memory is also becoming an option for more users. Among the 375 winning projects that are not fully counted by the Digital Intelligence Frontline, at least 20 projects explicitly include the procurement of all-flash memory products, and the purchasers are widely distributed in industries, covering hospitals, governments, finance, operators, scientific research and other fields. Among them, hospitals issued the most orders, reaching 11, contributing more than half of the projects.
From the perspective of the main targets, the procurement of all-flash storage is currently showing an obvious head effect, and the products of major domestic storage manufacturers such as Huawei, Xinhua III, and Lenovo Lingtuo are being purchased more, such as at least 11 projects involving Huawei's all-flash storage products. Dell, IBM, etc. are also key brands to purchase.
In addition to these projects, there is also no shortage of procurement of all-flash memory products in energy, transportation and other industries, such as the procurement of "2024 scientific research hardware-NAS all-flash storage new purchase and existing storage expansion" completed by CNOOC (China) Co., Ltd. Tianjin Branch in September this year, and the procurement of "all-flash storage and other information equipment projects" completed by China Railway Hohhot Bureau Group Co., Ltd.
There are two types of all-flash memory, centralized all-flash and distributed all-flash. Among them, centralized all-flash is mainly suitable for scenarios such as high-performance computing and high IOPs, such as gene sequencing. With the development of software-defined storage and hyper-convergence, distributed all-flash is supporting more scenarios like generative AI.
According to IDC statistics, although all-flash storage accounts for nearly 4% of global storage shipments, only 25% in China, and "centralized storage may account for 35%", but as module prices gradually stabilize, user work scenarios pay more attention to performance, and Huawei, Inspur and other manufacturers self-developed SSD, SSD deployment capacity is gradually increasing, and the growth of all-flash memory is expected to continue to lead the market average growth rate at a rapid pace, becoming a major trend in the future.
In the face of this definite trend, all companies are accelerating the layout of all-flash products. In May, Inspur Information released the distributed all-flash storage AS13000G7-N series specially optimized for large models; In June, Sugon Storage announced the upgrade of distributed storage ParaStor and officially released the world's first 100 million-level IOPS centralized all-flash storage FlashNexus...... In September, Huawei also launched a new generation of OceanStor Dorado all-flash storage, which boasts three capabilities: extreme performance, extreme resilience, and AI-ready.
We will continue to pay attention to the future of the storage market.