Welcome back to the Protocol Power Index, a ranking of the most powerful companies by tech industry subsector, as well as the companies best positioned to challenge them. This time: hybrid storage .

While the Big Three of AWS, Microsoft Azure and Google Cloud dominate cloud storage, many companies still aren't sure if the public cloud is the right place to put all of their data. Out of that concern has grown the thriving sector that is hybrid storage.

The desire to shun the public cloud can be born out of issues relating to compliance, governance, latency, reliability or simply an aversion to change. But the solution for companies with such concerns — whether they're highly regulated finance firms or performance-focused AI startups — often looks the same: a blend of on-premises and cloud storage.

Despite the dominance the biggest vendors have over cloud storage, companies and governments still spent nearly $90 billion on on-premises hardware and software in 2020 , and 80% of companies have a hybrid cloud strategy . To make matters more complicated, 92% of companies plan on leveraging multiple clouds , which makes finding, analyzing, managing and updating data difficult. So it's no surprise that dozens of players — legacy companies and startups alike — have popped up to solve these challenges in a hybrid and multicloud world, with no single final winner in sight. And, for now at least, the Big Three haven't taken full control of the market.

Amazon, Microsoft, Alibaba and Google do, of course, have leading hybrid and multicloud storage offerings. But, per our Power Index methodology , we've omitted them from this analysis due to their sheer size and inconsistencies in segment-specific data in order to focus on other established and up-and-coming players in the space. We have, however, written about how these vendors will continue to shape the space in the "What happens next" section after the leaderboard.

So which companies have the lead in this space right now? And which ones are challenging that dominance? We've ranked the market for you.

Ranking	Company	Score
1	NetApp	79.56
2	Dell Technologies	77.65
3	HPE	74.21
4	IBM	69.00
5	Pure Storage	66.51
6	VMware	66.00
7	Nutanix	53.93
8	Qumulo	44.58
9	Cohesity	42.95
10	Rackspace Technology	36.25

Explore the Data

The Protocol Power Index is designed to view power through a holistic lens that reflects how modern tech companies amass and exercise their strength. To do so, the Power Index takes into account 30 metrics across five categories — Economics, Leadership, Innovation, People and Politics & Policy — and synthesizes them into a single Power Score. Read our full methodology statement here .

What happens next?

Three forces stand to shape the companies operating in the observability software space in the coming years: big cloud bundling, security vulnerabilities and enterprise cost-cutting.

Momentum Ranking	Company	Score
1	Qumulo ↑	40.0
2	Pure Storage ↑	36.0
3	NetApp	35.0
4	Cohesity ↑	34.1
5	VMware ↑	29.0
T-6	Dell Technologies	26.0
T-6	HPE	26.0
T-8	IBM	22.0
T-8	Nutanix	22.0
10	Rackspace	17.7

Compliance and governance play a huge role in determining the size of the hybrid storage market, and public cloud vendors' industry-specific offerings pose a real threat to growth.

• The financial services and health care industries are often considered slower adopters of the cloud, a result of the volume of data produced, the sensitivity of that data and the latency requirements dictated by the nature of the data.
• In finance, that combination of factors has made hybrid cloud the most popular approach in the industry, according to research Google published in August. Or as Northwestern Mutual CIO Neal Sample noted last year , sometimes on-premises storage is simply "the right tool for the right job" when ultra-reliability is required.
• Also, 78% of the organizations Google surveyed said "regulatory uncertainty over the use of public cloud prevents their organizations from adopting cloud technologies that would otherwise provide benefit to them."
• While the industries with the most sensitive data are a bastion for hybrid cloud adoption for now, public cloud vendors are using industry-specific offerings to take control of some of the ground they've so far been unable to claim. In May, AWS launched FinSpace , which it hopes will be the public cloud answer for some of the financial services requirements. It's one of 16 industry-specific offerings the company now has on tap. Google Cloud also unveiled Datashare in May, while the Microsoft Cloud for Financial Services became available in October .
• The promise of industry-specific offerings from the Big Three is the power of the public clouds tailored to the compliance needs of different industries to generate trust, without the need for full lift-and-shift — moving servers from on-premises to the cloud with no modifications — buy-in. Sound familiar? It's a very similar pitch to the companies specializing in hybrid management. And if organizations decide en masse that industry clouds can offer the same security and governance as on-premises solutions, the landscape could shift dramatically.

How hybrid will the hybrid cloud actually be? Data repatriation and so-called cloud-bursting technologies will affect how far companies go in using their own hardware.

• It's been half a year since Andreessen Horowitz set off alarm bells at AWS, Azure and GCP with a think piece on the prospect of repatriation of workloads like storage and compute. Using Dropbox as an example — it saved around $75 million over two years by building its own infrastructure — the primary argument was that the choice to use public clouds, while valuable in the early stages of an organization's data strategy, ultimately puts significant pressure on a company's margins as it scales.
• It wasn't a new argument . In the past, HPE CEO Antonio Neri had compared vendor lock-in to leaving the Hotel California , and IDC had gone so far as to call repatriation (at least of specific workloads) an integral part of cloud migration.
• Coming from a16z though, the piece prompted a new review of the data, and, as expected, the legacy tech companies, now competing in the hybrid market, acted quickly to seize on the idea that repatriation is the future.
• Still, few companies seem to actually be repatriating. Dropbox is a nice example, but a survey done by the Uptime Institute in 2020 showed that 70% of respondents hadn't repatriated any workloads in the previous year. And the voices against repatriation have argued that the idea presented in the a16z piece was simplistic , in that setting up the internal infrastructure and staffing necessary to support on-premises maintenance was a difficult and costly challenge in and of itself.
• If repatriation (however much it does happen) is a win for on-premises storage that would trickle down into hybrid storage success, the broader adoption of cloud bursting — where private servers or clouds are used for the most part, with public clouds acting as a backup for workload surges and overflows — would be a direct win for the hybrid industry.
• The rise of remote work has been a boon for the employment of infrastructure that supports cloud bursting — Zoom being an obvious example of the practice — so it's no surprise bursting has remained a buzzword among hybrid players, even if its actual implementation proves difficult .
• Still, the two trends together will determine how large the hybrid market actually is. If the rise of industry-specific offerings is a win for the public cloud providers, the balance of the hybrid market depends on whether on-premises advantages (real or perceived) can keep pace with the developments of the cloud.

And then there are new storage technologies. Eventually, data might completely outgrow traditional storage technologies, which could end up defining the R&D priorities of storage companies down the line.

• Forecasts still show massive data growth coming in the next several years, from IDC and Seagate's projection that volume could hit 163 zettabytes by 2025 up from around 59 zettabytes now and the projections built off of that IDC model that show continued exponential growth to the tune of a tenfold increase of today's data volume by 2030.
• The explosive expansion of data production — however much it ends up growing — has led some to look toward the possibility of a brewing data crisis , not dissimilar to the chip shortage that's been unfolding globally over the past two years.
• As a result, there's been an increased focus on alternative mediums for storage that would alleviate an impending crisis while also saving organizations the sometimes-costly prospect of continued hardware upgrades as new technology rolls out.
• To that end, Microsoft has been a leader in looking at DNA as a viable alternative to traditional storage hardware, while other experts say crystals may end up aligning business strategies as much as they do chakras. Glass has been offered as another alternative.
• Take some of this with a grain of salt , though: There is the possibility that more efficient use of storage space , the development of better hardware or the further growth of the compression market could alleviate any kind of crisis.
• But researchers are looking at alternative ways to store data nonetheless, and a breakthrough in that research could completely upend the storage market (and the hybrid market with it) if it ever were to become a reality.

Methodology

To rank the competitors, we've developed a formula that encapsulates 30 criteria. Those criteria span five groupings that factor into power: Economics, Leadership, People, Innovation & Politics and Policy. We then developed two systems for weighting the criteria — one for measuring power and the other for measuring momentum — such that companies can be scored on a 0–100 scale. Read our full methodology here .