IDC: Hyper-Converged Market Explodes To $1.5 Billion In Q2; Dell, Nutanix On Top

Riding the HCI Rocket Ship

The hyper-converged market skyrocketed to nearly $1.5 billion in sales during the second quarter of 2018, up a whopping 78 percent year over year, according new data from research firm IDC. The leaders are clear, with Dell and Nutanix accounting for nearly half of the worldwide hyper-converged infrastructure (HCI) revenue.

The global market for converged systems generated $3.5 billion during the second quarter, representing an increase of 10 percent year over year, with HCI leading the way.

"HCI solutions helped to drive second-quarter market expansion thanks, in part, to their ability to reduce infrastructure complexity, promote consolidation, and allow IT teams to support an organization's business objectives," said Sebastian Lagana, research manager for Infrastructure Platforms and Technologies at IDC, in a statement. "Data center infrastructure convergence remains an important investment driver for companies around the world."

CRN breaks down the global market leaders in three segments: hyper-converged systems; HCI software providing core capabilities; and certified reference systems and integrated infrastructure.

Hyper-Converged Worldwide Market-Share Leaders In Q2

Dell’s market share: 28.8 percent

Nutanix’s market share: 18.9 percent

Cisco’s market share: 5.3 percent

HPE’s market share: 4.9 percent

Dell took home the gold in the second quarter by generating $419 million in hyper-converged revenue, up 95 percent year over year. Market share for Dell rose 2.5 points year over year to 28.8 percent. Nutanix captured $275 million in worldwide hyper-converged system sales, an increase of 49 percent compared with the same quarter one year ago. However, Nutanix's share dropped from 22.7 percent in second-quarter 2017 to 18.9 percent share. Cisco placed third with 5.3 percent market share, down from 6.6 percent share one year ago. Cisco's hyper-converged sales increased 45 percent year over year to $77 million. Rounding out the leaderboard is Hewlett Packard Enterprise, which generated $72 million in sales, up a whopping 119 percent year over year. HPE's share increased from 4 percent to 4.9 percent year over year.

Global revenue from hyper-converged systems grew 78 percent year over year to $1.45 billion in second- quarter 2018, accounting for 41 percent of the total converged systems market. "Looking into the rest of 2018, Dell has excellent opportunity to continue to expand its leadership, bolstered by internal alignment of several technologies to help speed the process of decision making, product alignment and innovation," said IDC in its report.

Hyper-Converged Worldwide Software Market-Share Leaders In Q2

Nutanix’s market share: 34.2 percent

VMware’s market share: 34.1 percent

Dell’s market share: 5.4 percent

Cisco’s market share: 5.3 percent

HPE’s market share: 4.9 percent

Nutanix and VMware were neck-and-neck for HCI market-share leadership from a software ownership standpoint. Systems running Nutanix's hyper-converged software generated $498 million in total second- quarter revenue, up 89 percent year over year, to slightly win the gold over VMware. VMware, which is majority-owned by Dell Technologies, captured $496 million in sales for systems running its hyper-converged software, an increase of 97 percent year over year. Nutanix's market share increased from 32.3 percent to 34.2 percent year over year, while VMware's share jumped from 30.9 percent to 34.1 percent in the same time. The two vendors have a heated hyper-converged rivalry going on this year even though Dell and Nutanix own an HCI technology partnership with the XC Series.

Other leaders IDC ranked by the software owner providing the core hyper-converged capabilities are Dell with $79 million in sales, up 14 percent year over year; followed by Cisco with revenue of $78 million, an increase of 45 percent compared with second-quarter 2017; then HPE with $72 million in sales, up 70 percent year over year.

Certified Reference Systems And Integrated Infrastructure Market-Share Leaders In Q2

Dell’s market share: 47.5 percent

Cisco/NetApp’s market share: 35.7 percent

HPE’s market share: 8.1 percent

The certified reference systems and integrated infrastructure market generated a total of $1.3 billion in revenue during the second quarter, representing a 14 percent decline year over year. The market consists of pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment and software management.

Dell was the largest supplier thanks to its VxBlock Systems and Ready Solutions, capturing $640 million in total sales, representing 47.5 percent of the overall market. The technology partnership between Cisco and NetApp generated $481 million in revenue to win second place at 35.7 percent share. HPE placed third with 8.1 percent worldwide share by generating $108 million in sales during the quarter.