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IDC: Dell No. 1 in CI, HCI revenue

This blog post is part of our Essential Guide: Dell Technologies World 2018 conference coverage

Dell won the trifecta in the latest IDC Quarterly Converged Tracker report.

Dell Technologies-owned technology led market share across the board in converged and hyper-converged systems, according to IDC’s fourth-quarter numbers. IDC shows Dell EMC leading the market in converged and hyper-converged infrastructure (HCI) revenue, and Dell subsidiary VMware was No. 1 in IDC’s new breakout of software-driven HCI sales.

The overall sales trend continues to swing towards HCI, which grew 69.4% year-over-year to $1.25 billion in the fourth quarter of 2017 according to IDC. Converged Infrastructure – including reference architectures and integrated systems – declined 3.4% year-over-year to $1.7 billion.

The combined converged and hyper-converged markets came in over $12.5 billion for all of 2017, according to IDC. That’s a 9.4% increase over 2016.

IDC looks at fourth-quarter HCI revenue in two ways: by brand of the appliance and by the owner of the software. Either way, the total revenue comes out to $1.25 billion but the software-based table credits the revenue of a sale to the vendor that supplies the software.

HCI revenue is dominated by Dell EMC/VMware and Nutanix. Dell and Nutanix combine for more than 47% of the HCI branded market and 70% of the software-based HCI revenue.

Dell was ahead of Nutanix in HCI share in branded systems for the third straight quarter. Dell branded HCI revenue of $347 million in the quarter grew 138% from the previous year and its market share jumped from 19.8% to 27.8%. Nutanix branded HCI revenue grew 51% to $243 million, but its market share slipped from 21.9% to 19.5%.

VMware’s $405 million led the HCI software-based revenue charts, representing an 111% jump and 32.4% share. Nutanix placed second with $369 million for 29.5% share. Nutanix software revenue increased 59%.

Although IDC did not publish the software-driven HCI numbers in previous trackers, its report this week shows Nutanix led in software-driven HCI sales a year ago at 31.4% in the fourth quarter of 2016. VMware was second at 26% a year ago.

Designating HCI revenue based on software allows IDC to recognize VMware, which does not sell branded systems. VMware sells its vSAN software in partnerships with most server vendors, however.

The software-driven HCI list also provides a better view of sales of Nutanix software. Nutanix sells branded appliances, but also sells its software through partnerships with leading server vendors. Nutanix partners include Dell, which packages Nutanix software on Dell EMC XC appliances. IDC credits Dell EMC XC sales to Dell on the branded side and Nutanix on the software list.

Dell, which also sells HCI systems running vSAN and Dell EMC ScaleIO software, placed third in HCI based on software at $96.5 million for 7.7% share.

Hewlett Packard Enterprise and Cisco are the fastest growing HCI players. HPE sales increased 340% year-over-year to $62 million in branded HCI products, largely because of its early 2017 acquisition of early HCI player SimpliVity. HPE increased its share from 1.9% to 4.9% in the course of the year. Cisco increased HCI revenue 200% to $56.3 million, and jumped its share from 2.5% to 4.5%.

Dell’s Converged Infrastructure lead slips

Dell led the certified reference architecture and integrated infrastructure market with $735 million but lost share to its closest rivals. Dell’s revenue fell 14.5% year-over-year. Cisco/NetApp converged revenue grew 16% to $566 million and its market share increased from 27.4% a year ago to 33% in the fourth quarter of 2017. HPE revenue increased 4% to $289 million and its market share grew from 15.7% to 16.9%.

IDC defines certified reference systems & integrated infrastructure as “pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software.”

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