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IDC: hyper-converged platforms outgrows converged infrastructures

Recent IDC research shows hyper-converged platforms are quickly catching up to the converged systems market.

For the third quarter of 2017, global revenue on converged systems increased nearly 11% to $2.99 billion, according to the latest IDC Tracker market data. Most of that growth came from hyper-converged systems revenue, which jumped 68% year over year from $597 million in the third quarter of 2016 to $1 billion last quarter.

Speeding the transition was a string of mergers and acquisitions, including the first full operating year for a merged Dell EMC and NetApp’s foray into HCI storage based on SolidFire all-flash arrays.

IDC defines converged systems as those that combine servers, disk storage, networking and management software.  The IT analyst firm divides the converged systems market in three segments: hyper-converged infrastructure (HCI), integrated platforms, and vendor-validated reference architectures for private clouds.  IDC Tracker focuses on systems that are branded, certified, designed and supported by vendors.  Systems implemented though integrators or partners are excluded.

Hyper-converged platforms consolidate computing, networking and storage in a single virtualized appliance. Dell EMC overtook HCI pioneer Nutanix, generating $307 million, up 158%, to improve its market share to 30.6% — up from 20% a year ago.

The Dell EMC HCI storage portfolio includes the VxRail appliance, the rack-scale VxRack system and XC Series family.  The XC Series bundles Nutanix software on Dell PowerEdge servers. That partnership started in 2014.

Nutanix captured nearly 21% of the market, down nearly 1% year over year, although its revenue grew 61% to $207.4 million. Dell EMC and Nutanix combined to capture 51% of overall HCI sales.

Cisco muscled past Hewlett Packard Enterprise to claim third place. The network hardware vendor has made strides since entering the market in 2016 with Cisco HyperFlex hyper-converged. After posting $10.2 million in HCI revenue a year ago, Cisco HyperFlex sales skyrocketed 545% to $65.7 million, good for 6.6% market share. The Cisco hyper-converged platforms are sold as a minimum three-node cluster of Cisco HyperFlex HX220c M5 all-flash or hybrid nodes integrated by Cisco UCS fabric interconnections.

HPE’s HCI storage system revenue grew by 144%, with third-quarter sales of $35.6 million more than doubling year over yearup from $14.6 million a year ago.  The vendor last year launched the HPE HyperConverged 380 appliance to go after VMware customers. HPE followed that news by acquiring Nutanix early rival SimpliVity in January for $650 million.

IDC’s figures suggest there is room for other HCI storage competitors to stake a claim in the market. Nearly 39% of the HCI sales were attributed to other vendors, totaling more than $386 million.

Dell EMC, NetApp battle on converged reference designs

NetApp was late to the HCI market, making a foray In October with a hyper-converged platform based on SolidFire all-flash arrays. But according to IDC, NetApp is the only top-five storage vendor to post positive revenue in certified reference systems and integrated architecture. That market grew just 1.55% year over  year to $1.44 billion.

The NetApp FlexPod converged infrastructure program combines NetApp storage with Cisco UCS servers and switching.  Cisco-NetApp reference architecture produced $486 million, representing one-year revenue growth of 56%.

NetApp improved its share in converged systems reference architecture to 33.6%, up from 22%. Dell EMC still leads the pack with $697 million, but its sales and market share declined. Dell EMC controls 48% of the market for converged systems reference architecture, down from 51% last year. Its revenue in the category slipped from $729 million last year for a 4% drop. HPE experienced a larger drop, with sales tumbling 42% to $149 million.

IDC said integrated platform sales comprise about 18% of the converged systems market. Oracle dominated the segment with $20.4 million and nearly 46% market share.