18 Jun 2020

Worldwide Converged Systems Market Grows 4.5% Year Over Year During the First Quarter of 2020, According to IDC

FRAMINGHAM, Mass., June 18, 2020 – According to the International Data Corporation (IDC) Worldwide Quarterly Converged Systems Tracker, worldwide converged systems market revenue increased 4.5% year over year to $3.9 billion during the first quarter of 2020 (1Q20).

"The overall converged systems market showed resilience during a difficult macro environment in the first quarter of 2020," said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC. "While the hyperconverged system market continued to expand as enterprises seek to take advantage of software-defined infrastructure, the Certified Reference Systems & Integrated Infrastructure segment posted its best quarter of growth since 2Q19 on the strength of richly configured platform sales related to demanding workloads in industries such as healthcare and telecoms."

Converged Systems Segments

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 just over $1.4 billion in revenue during the first quarter, which represents growth of 4.4% year over year and accounts for 36.8% of all converged systems revenue. Integrated platforms sales declined 8.7% year over year in 1Q20, generating $478 million worth of revenue. This amounted to 12.3% of the total converged systems market revenue. Sales of hyperconverged systems grew 8.3% year over year during the first quarter of 2020, generating just under $2.0 billion worth of revenue. This amounted to 50.9% 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 within this press release. 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 Technologies was the largest supplier with $666.3 million in revenue and a 33.6% share. Nutanix generated $260.0 million in branded hardware revenue, representing 13.1% of the total HCI market during the quarter. Hewlett Packard Enterprise finished the quarter in the number 3 spot with $118.7 million in revenue, which amounted to a 6.0% share.

Top 3 Companies, Worldwide Hyperconverged Systems as Branded, Q1 2020 (revenue in $M)

Company

1Q20 Revenue

1Q20 Market Share

1Q19 Revenue

1Q19 Market Share

1Q20/1Q19 Revenue Growth

1. Dell Technologiesa

$666.3

33.6%

$587.4

32.1%

13.4%

2. Nutanix

$260.0

13.1%

$255.1

13.9%

1.9%

3. Hewlett Packard Enterprise

$118.7

6.0%

$82.9

4.5%

43.1%

Rest of Market

$937.7

47.3%

$905.4

49.5%

3.6%

Total

$1,982.7

100.0%

$1,830.9

100.%

8.3%

Source: IDC Worldwide Quarterly Converged Systems Tracker, June 18, 2020

Table Notes:

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

The rankings based on the owner of the hyperconverged software show that new systems running VMware hyperconverged software represented $841.2 million in total 1Q20 vendor revenue, or 42.4% of the total market. Systems running Nutanix hyperconverged software represented $561.7 million in first quarter vendor revenue or 28.3% of the total market. Both amounts represent the value of all HCI hardware, HCI software, and system infrastructure software sold, regardless of how it was branded at the hardware level. As hardware sales are a major factor in these data, the chart should not be assumed to solely reflect, or completely align with, the respective companies' overall software performance.

Top 3 Companies, Worldwide Hyperconverged Systems Revenue Attributed to Owner of HCI Software, Q1 2020 (revenue in $M)

Company

1Q20 Revenue

1Q20 Market Share

1Q19 Revenue

1Q19 Market Share

1Q20/1Q19 Revenue Growth

1. VMware

$841.2

42.4%

$759.5

41.5%

10.8%

2. Nutanix

$561.7

28.3%

$526.2

28.7%

6.7%

T3. Hewlett Packard Enterprise*

$101.8

5.1%

$83.9

4.6%

21.3%

T3. Cisco*

$85.1

4.3%

$82.3

4.5%

3.5%

Rest of Market

$392.8

19.8%

$379.0

20.7%

3.6%

Total

$1,982.7

100.0%

$1,830.9

100.0%

8.3%

Source: IDC Worldwide Quarterly Converged Systems Tracker, June 18, 2020

Table Notes:

* IDC declares a statistical tie in the worldwide converged systems market when there is a difference of one percent or less in the share of revenues or unit shipments among two or more vendors.

Taxonomy Notes

Beginning with the release of 2019 results, 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 quality of service. For these disaggregated HCI solutions, the storage nodes may not have a hypervisor at all since they do not 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 & 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.

The Worldwide Quarterly Converged Systems Tracker is part of the Worldwide Quarterly Enterprise Infrastructure Tracker, which provides a holistic total addressable market view of the five key enabling infrastructure technologies for the datacenter (servers, external enterprise storage systems, purpose-built appliances: HCI and PBBA, and datacenter switches).

For more information about IDC's Worldwide Quarterly Converged Systems 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 tech media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.



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