Data Backup Digest

Despite the fact that there are more mobile users than ever before, and even more embracing smartphone technology on a daily basis, consumers aren't done with PCs altogether. In fact, many of the top PC manufacturers are reporting higher gains than expected. However, the consumer market is dwindling in at least one area: data storage.

'''What's Causing This Trend?'''

Consumers just aren't buying storage devices in the same quantities that they were a few years ago. According to a recent report, Dell's revenue from storage devices has dropped 11% year-over-year. This is despite significant gains – amounting to more than $10 billion – in the sale of PCs, laptops, tablets and miscellaneous hardware like printers and scanners.

Tom Sweet, chief financial officer with Dell Technologies, commented on the future of Dell's financial status by saying: "In fiscal 2019 we’ll continue to execute our long-term strategy, capitalizing on our broad portfolio of solutions for customers at every stage of the digital transformation journey."

So what's causing the difference in profitability between the consumer PC and storage markets? There are a number of factors, including:

- Factory-installed hard drives have greater capacities. In most cases, desktop PCs and even laptops include OEM hard drives that have more than enough space for most consumer applications – including high-end gaming.

- More consumers are turning to cloud computing. Instead of upgrading their hard drives or purchasing external storage devices, more consumers now trust their data to the cloud. In many cases – especially in consumer-level computing – it's not necessary to backup every single file on a hard drive. Using the cloud – or some other remote means – to store backup data not only reclaims local storage space, but it also helps protect consumers from data loss.

- The popularity of console and mobile gaming. Gaming has always been popular, but home consoles and smartphones mean there are more options to choose from than ever before. Although PC gaming dominates the global market, recent reports indicate that most U.S. gamers actually prefer consoles such as the Sony PlayStation or Microsoft Xbox.

All of these factors have a direct and very noticeable effect on the consumer storage market – prices are dropping. It's no coincidence that the price of both external and internal hard drives are dropping, and it's a trend that affects traditional, disk-based drives as well as next-gen solid-state drives (SSDs).

In some cases, the lower prices actually result in increased profitability. Western Digital – one of the largest and most popular manufacturers in the storage niche – reported significant revenue gains in 2017. Others, like Seagate, struggled to meet their past benchmarks.

Rationalizing the Need for Additional Storage

The costs of upgrading to a larger hard drive or adding an external device to your system are lower than ever before – but consumers aren't buying. Between factory-built PCs that include bigger and greater hard drives to the widespread embrace of cloud services, the need for large amounts of localized data storage just isn't there.