So, Is Leil Really Just a Niche Player? Let’s Talk.

One of the argument we’ve heard while talking to VCs: Leil only adds value in the SMR space, and even then, just for a tiny slice of the market. The gist: “Hyperscalers already have this figured out, and everyone else doesn’t need it.” But let’s pump the brakes and look at what’s actually going on.

The “Niche” Myth

Here’s the deal: saying SMR is only useful for hyperscalers (think Dropbox, Google, etc.) is missing the forest for the trees. Sure, Dropbox runs 90% of its storage on SMR drives, but that’s just the tip of the iceberg. Most enterprises and mid-sized companies haven’t even scratched the surface of SMR adoption. Why? Because making SMR work well takes some clever software and know-how – something Leil is actually pretty good at.
And get this: as more “regular” companies start to drown in data, they’ll need solutions that make SMR easy and efficient. So, if anything, the need for smart SMR software is just getting started.

Not Just About the Drives

Another thing the critics miss: modern storage isn’t just about the hardware. Mixing CMR and SMR drives in the same system? That’s a headache for most, but Leil’s tech makes it doable. That means more flexibility, better use of existing hardware, and less vendor lock-in. Speaking of vendors, being able to work with all three big HDD makers (Seagate, Western Digital, Toshiba) is a strength, not a weakness. It actually gives you more bargaining power, not less.

The Market Isn’t Standing Still

Let’s talk numbers. The SMR market is booming – some vendors report that more than 50% of the capacity shipped is shipped as SMR. Just let it sink in – it’s already making up half nearline shipments.

Why Is Everything Going Sequential?

Here’s where it gets interesting. As hard drives get bigger (think 50TB, 100TB), their ability to handle lots of random requests doesn’t keep up. The IOPS-per-terabyte (that’s how many reads/writes you can do per second, per TB) keeps dropping. So, if you want to store a ton of data without breaking the bank, you have two choices: move to 6x times (20x times as of H2 2026, as we speak) more expensive flash storage, or start writing and reading data sequentially.

And guess what? Most modern software is already heading that way. Systems like Kafka, big data platforms, and even some databases are built to write data in big, neat chunks – perfect for SMR drives. Plus, with clever software (like Leil’s Infinite Cold Engine), you can keep some of the drives powered down, saving energy and money.

What’s Next? The Storage Market Is Shifting – Fast

Here’s how I see it playing out:

Where’s the Opportunity?

The global HDD market is huge – over $20 billion now, with CAGR of around 20%. Most of that is still on conventional drives, but with the right software, SMR could take over a big chunk, especially for:

• Enterprise and mid-market: A bigger part of hard drive vendors’ revenue comes from high capacity drives. Most of these could benefit from SMR with the right setup.
• Backup and archive: These workloads are all about capacity, not speed. SMR is a natural fit.
• AI and analytics: Training big models? You need lots of cheap, dense storage, and you’re mostly reading big files anyway – again, perfect for SMR.

And don’t forget tape. The tape storage market is still worth billions, but SMR drives are faster and almost as cheap. For anything that needs to be accessed more than once in a blue moon, SMR is looking pretty tempting. Estimates say 40–60% of tape use could move to SMR over the next decade.

Bottom Line

The old way of thinking – random-access for everything, hyperscalers are the only ones who care about SMR – is out of date. As drives get bigger and workloads get smarter, sequential is the new normal. Leil isn’t stuck in a niche; it’s riding the wave of where storage is headed. If you’re looking at the future of data, you might want to look again at SMR and the companies making it work for everyone, not just the giants.

Author: Alexander Ragel
Alexander Ragel is the CEO of Leil, an Estonia-based storage infrastructure company building HDD-native software for the exabyte era. Leil is in active co-engineering partnership with Western Digital, validated across the WD, Seagate, and Toshiba drive ecosystems.