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02 Apr 2019

Worldwide Converged Systems Revenue Increased 14.8% Year Over Year During the Fourth Quarter of 2018 with Vendor Revenue Reaching $4.15 Billion, According to IDC

FRAMINGHAM, Mass., April 2, 2019 – According to the International Data Corporation (IDC) Worldwide Quarterly Converged Systems Tracker, worldwide converged systems market revenue increased 14.8% year over year to $4.15 billion during the fourth quarter of 2018 (4Q18).

"Hyperconverged infrastructure demand remains the primary driver of converged systems market growth," said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC. "As HCI solutions are increasingly capable of operating business-critical workloads while reducing datacenter complexity and promoting affordability, the segment will continue to expand its share of the overall converged systems market."

Converged Systems Market Segment Results

IDC's converged systems market view offers three segments: certified reference systems & integrated infrastructure, integrated platforms, and hyperconverged systems. The certified reference systems & integrated infrastructure market generated $1.6 billion in revenue during the fourth quarter, which represents a year-over-year decline of 6.4% and 38.6% of total converged systems revenue. Integrated platforms sales declined 8.4% year over year in 4Q18, generating revenue of $619 million. This was 14.9% of the total converged systems market revenue. Sales of hyperconverged systems grew 57.2% year over year during the fourth quarter, generating $1.9 billion in revenue. This amounted to 46.5% of the total converged systems market.

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. Rankings based on a branded view of the market can be found in the first table of this press release and rankings based on the owner of the hyperconverged software can be found in the second table. Both tables include all the same software and hardware, summing to the same market size.

As it relates to the branded view of the hyperconverged systems market, Dell, Inc. was the largest supplier in 4Q18 with $552.4 million in revenue and a 28.6% share of the market. Nutanix generated $284.9 million in branded revenue, which represents 14.8% of the total HCI market during the quarter and 49% of the total HCI revenue generated through sales of systems running Nutanix software. HPE was the third largest branded HCI vendor with $104.9 million in revenue and 5.4% market share.

Top 3 Companies, Worldwide Hyperconverged Systems as Branded, Q4 2018 ($M)

Company

4Q18 Revenue

4Q18 Market Share

4Q17 Revenue

4Q17 Market Share

4Q18/4Q17 Revenue Growth

1. Dell, Inc.*

$552.4

28.6%

$336.5

27.4%

64.2%

2. Nutanix

$284.9

14.8%

$230.2

18.8%

23.7%

3. HPE

$104.9

5.4%

$61.6

5.0%

70.3%

Rest of Market

$988.2

51.2%

$599.5

48.8%

64.8%

Total

$1,930.5

100.0%

$1,227.9

100.0%

57.2%

Source: IDC Worldwide Quarterly Converged Systems Tracker, April 2, 2019

Notes:

* – Dell, Inc. 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 $734.9 million in total fourth quarter vendor revenue or 38.1% of the total market. Systems running Nutanix hyperconverged software represented $576.2 million in fourth quarter vendor revenue or 29.8% of the total market. Both amounts represent sales of all HCI software and hardware regardless of how it was branded.

Top 3 Companies, Worldwide Hyperconverged Systems Based on Owner of HCI Software, Q4 2018 ($M)

Company

4Q18 Revenue

4Q18 Market Share

4Q17 Revenue

4Q17 Market Share

4Q18/4Q17 Revenue Growth

1. VMware

$734.9

38.1%

$394.8

32.2%

86.2%

2. Nutanix

$576.2

29.8%

$371.1

30.2%

55.3%

3. HPE

$104.9

5.4%

$62.2

5.1%

68.8%

Rest of Market

$514.4

26.6%

$399.8

32.6%

28.6%

Total

$1,930.5

100.0%

$1,227.9

100.0%

57.2%

Source: IDC Worldwide Quarterly Converged Systems Tracker, April 2, 2019

Taxonomy Notes

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 & 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.

IDC 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 multinode servers. IDC will count each appliance, not each node, as a single system.

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

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools.

About IDC

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 that activates and engages the most influential technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn.



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