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27 Sep 2016

Worldwide Converged Systems Revenue Increases 12.1% Year Over Year in the Second Quarter of 2016, Surpassing $2.9 Billion in Value, According to IDC

FRAMINGHAM, Mass., September 27, 2016 – According to the International Data Corporation (IDC) Worldwide Quarterly Converged Systems Tracker, the worldwide converged systems market increased revenue 12.1% year over year to $2.9 billion during the second quarter of 2016 (2Q16). The market generated 1,693 petabytes of new storage capacity shipments during the quarter, which was up 31.8% compared to the same period a year ago.

"More and more, we are seeing end users looking beyond the hardware specs and performance metrics; end users in this market are looking for vendors that are adept at building and maintaining deep customer relationships," said Kevin M. Permenter, senior research analyst, Computing Platforms. "Converged system vendors that are able to build these deep relationships with their customers are positioned for growth."

Converged Systems Segments

IDC distinguishes between four product categories: Integrated Systems, Certified Reference Systems, Integrated Platforms, and Hyperconverged Systems.

  • Integrated Systems are pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software.
  • Like integrated systems, Certified Reference Systems are pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software. Certified reference systems, however, are designed with systems from multiple technology vendors.
  • 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 ability to provide all compute and storage functions through the same server-based resources.

During the second quarter of 2016, the combined Integrated Infrastructure and Certified Reference Systems markets generated revenues of $1.6 billion, which represented a year-over-year increase of 4.7% and 54.8% of the total market revenue. EMC was the largest supplier of the combined Certified Reference Systems and Integrated Infrastructure categories with $699.58 million in revenue, or 43.0% share of this market segment. Please note that all VCE product brands, which became the EMC Converged Platforms Division, are reported under EMC starting with the first quarter of 2016 – all historical data from 2012 to 2015 will remain under the VCE vendor.

Top 3 Vendors, Worldwide Integrated Systems and Certified Reference Systems, Second Quarter of 2016 (Revenues are in Millions)

Vendor

2Q16 Revenue

2Q16 Market Share

2Q15 Revenue

2Q15 Market Share

2Q16 /2Q15 Revenue Growth

1. EMC*

$699.58

43.0%

$671.56

43.2%

4.2%

2. Cisco/NetApp

$429.54

26.4%

$369.38

23.8%

16.3%

3. HPE

$290.72

17.9%

$267.79

17.2%

8.6%

All Others

$207.16

12.7%

$244.55

15.7%

-15.3%

Total

$1,627.0

100.0%

$1,553.3

100.0%

4.7%

Source: IDC Worldwide Quarterly Converged Systems Tracker, September 27, 2016

* Note: VCE product brands became the EMC Converged Platforms Division and are reported under EMC starting with the Q1 2016 quarter.



Integrated Platform revenue declined 3.5% year over year during the second quarter of 2016, generating $864.09 million in revenues. This amounted to 29.1% of the total market revenue. Oracle was the top-ranked supplier of Integrated Platforms in the quarter, generating revenues of $481.97 million and capturing a 55.8% share of the category.

Top 3 Vendors, Worldwide Integrated Platforms, Second Quarter of 2016 (Revenues are in Millions)

Vendor

2Q16 Revenue

2Q16 Market Share

2Q15 Revenue

2Q15 Market Share

2Q16 /2Q15 Revenue Growth

1. Oracle

$481.97

55.8%

$482.86

53.9%

-0.2%

2. HPE

$84.65

9.8%

$30.41

3.4%

178.4%

3. IBM

$44.39

5.1%

$79.29

8.9%

-44.0%

All Others

$253.08

29.3%

$303.04

33.8%

-16.5%

Total

$864.09

100.0%

$895.6

100.0%

-3.5%

Source: IDC Worldwide Quarterly Converged Systems Tracker, September 27, 2016



Hyperconverged sales grew 137.5% year over year during the second quarter of 2016, generating $480.62 million in revenue. This amounted to 16.2% of the total market revenue. Please note the above hyperconverged systems revenues, like the other product categories listed here, exclude revenue from support and maintenance contracts.

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Taxonomy Notes:

IDC defines converged and hyperconverged 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.

For more information about IDC's Worldwide Quarterly Integrated Infrastructure and Platforms Tracker, please contact Lidice Fernandez at 305-351-3057 or lfernandez@idc.com.

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International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.

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Contact
For more information, contact:

Michael Shirer
press@idc.com
508-935-4200

Eric Sheppard
esheppard@idc.com
508-988-7925

Kevin Permenter
kpermenter@idc.com
508-988-6916