19% Y/Y Growth in 1Q19 for WW HCI Market Reaching $3.75 Billion – IDC

According to the International Data Corporation‘s Worldwide Quarterly Converged Systems Tracker, WW converged systems market revenue increased 19.3% year over year to $3.75 billion during 1Q19.

“Hyperconverged infrastructure remains the primary growth driver in the converged systems market,” said Sebastian Lagana, research manager, infrastructure platforms and technologies, IDC. “Reduced operating complexity, ease of deployment, and excellent fit within hybrid cloud environments continue to drive HCI adoption across a broad range of customers and workloads.”

Converged Systems Segments
Converged systems market view offers three segments: certified reference systems and integrated infrastructure, integrated platforms, and hyperconverged systems. The certified reference systems and integrated infrastructure market generated nearly $1.4 billion in revenue during 1Q19, which represents 9.0% Y/Y growth and 36.6% of total converged systems revenue. Integrated platforms sales declined 13.3% Y/Y during 1Q19, generating revenues of $556 million. This amounted to 14.8% of the total converged systems market revenue. Revenue from hyperconverged systems sales grew 46.7% Y/Y during 1Q19, generating $1.8 billion worth of sales. This amounted to 48.6% of the total converged systems market.

WW converged systems market by product category, 1Q19

IDC offers two ways to rank technology suppliers within the hyperconverged systems market: by the brand of the hyperconverged solution or by the owner of the software providing the core hyperconverged capabilities.

As it relates to the branded view of the hyperconverged systems market, Dell Technologies was the largest supplier with $586.7 million in revenue and a 32.2% share. Nutanix generated $255.7 million in branded revenue. This represented 14.0% of the total HCI market during the quarter. HPE was the third largest branded HCI vendor, with $83.5 million in revenue or 4.6% market share.

Top 3 companies, WW hyperconverged systems as branded, 1Q19
(in $million)

Notes:
Dell Technologies represents the combined revenues for Dell and EMC sales for all quarters shown.

From the software ownership view of the market, systems running VMware hyperconverged software represented $750.7 million in total first quarter vendor revenue, or 41.1% of the total market. Systems running Nutanix hyperconverged software represented $526.5 million in first quarter vendor revenue, or 28.9% of the total market. Both amounts represent sales of all HCI software and hardware, regardless of how it was branded.

Top 3 companies, WW hyperconverged systems
based on owner of HCI software, 1Q19
(in $million)

Taxonomy Notes
Beginning with this release, IDC has expanded its definition of the hyperconverged systems market segment to include a new breed of systems called Disaggregated HCI (hyperconverged infrastructure). Such systems are designed from the ground up to only support distinct/separate compute and storage nodes. An example of such a system in the market today is NetApp’s HCI solution. They offer non-linear scaling of the hyperconverged cluster to make it easier to scale compute and storage resources independent of each other while offering crucial functions such as QoS. For these disaggregated HCI solutions, the storage nodes may not have a hypervisor at all, since they don’t have to run VMs or applications.

IDC defines converged systems as pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software. Systems not sold with all four of these components are not counted within this tracker. Specific to management software, IDC includes embedded or integrated management and control software optimized for the auto discovery, provisioning and pooling of physical and virtual compute, storage and networking resources shipped as part of the core, standard integrated system. Numbers in this press release may not sum due to rounding.

Certified reference systems and integrated infrastructure are pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software. Integrated platforms are integrated systems that are sold with additional pre-integrated packaged software and customized system engineering optimized to enable such functions as application development software, databases, testing, and integration tools. Hyperconverged systems collapse core storage and compute functionality into a single, highly virtualized solution. A key characteristic of hyperconverged systems that differentiate these solutions from other integrated systems is their scale-out architecture and their ability to provide all compute and storage functions through the same x86 server-based resources. Market values for all three segments includes hardware and software but excludes services and support.

Analyst firm considers a unit to be a full system including server, storage, and networking. Individual server, storage, or networking nodes are not counted as units. Hyperconverged system units are counted at the appliance (aka chassis) level. Many hyperconverged appliances are deployed on multi-node servers. IDC will count each appliance, not each node, as a single system.