Dell Rolls On In HCI Space

March 29, 2021

According to the International Data Corporation (IDC) Worldwide Quarterly Converged Systems Tracker, worldwide converged systems market revenue grew 0.2% year over year to $4.5 billion during the fourth quarter of 2020 (4Q20).

"The converged systems market closed out the year with tepid 0.2% year-over-year growth in the fourth quarter, while the market for the full year 2020 finished down 0.6% annually," said Greg Macatee, research analyst, Infrastructure Platforms and Technologies Group at IDC. "That said, hyperconverged system sales were the market's main pocket of growth in 4Q20, finishing up 7.4% year over year, which is an acceleration over what we have witnessed over the past few quarters. Geographically, EMEA experienced double-digit growth during the quarter as did the China (PRC), Japan, and Latin America markets, which helped offset losses in North America and Asia/Pacific (excluding China and Japan) as the year came to a close."

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 grew revenues 0.1% year over year to $1.6 billion in 4Q20, which represented 35.6% of all converged systems revenue. Integrated platforms revenues declined 25.9% year over year to just under $460 million in 4Q20. This amounted to 10.1% of total converged systems market revenue. Revenue from hyperconverged systems grew 7.4% year over year during the quarter to $2.5 billion. This represented 54.2% 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 number 1 supplier with $801.8 million in revenue or a 32.6% share. Hewlett Packard Enterprise finished second during 4Q20, totaling $331.7 million in revenue and a 13.5% share of the market. Nutanix took the third spot with $254.1 million in revenue, which accounted for 10.3% of the market.

Top 3 Companies, Worldwide Hyperconverged Systems as Branded, Q4 2020 (revenue in $M)
Company	4Q20 Revenue	4Q20 Market Share	4Q19 Revenue	4Q19 Market Share	4Q20/4Q19 Revenue Growth
1. Dell Technologies^a	$801.8	32.6%	$721.4	31.5%	11.1%
2. Hewlett Packard Enterprise	$331.7	13.5%	$264.5	11.5%	25.4%
3. Nutanix	$254.1	10.3%	$312.9	13.6%	-18.8%
Rest of Market	$1,075.5	43.7%	$994.6	43.4%	8.1%
Total	$2,463.1	100.0%	$2,293.4	100.0%	7.4%
Source: IDC Worldwide Quarterly Converged Systems Tracker, March 18, 2021

Table Notes:

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

Numbers in this press release may not sum due to rounding.

IDC notes that previous releases of the Worldwide Quarterly Converged Systems Tracker had placed sales of HCI solutions based on VMware's vSAN ReadyNode program within Other Suppliers. Retroactive through 1Q2019, IDC has moved revenue attribution of these HCI solutions to the server vendor. While attribution of these sales shifted from Other Suppliers to individual server vendors, this shift did not change the size of the HCI market. This shift did, however, result in new branded HCI shares for some vendors.

In terms of the HCI systems' software brand, new systems running VMware hyperconverged software delivered revenue of $953.8 million in 4Q20 or 38.7% of the total market. Systems running Nutanix hyperconverged software had $575.5 million in vendor revenue during 4Q20 or 23.4% of the total market. It should be noted that Nutanix' year-over-year comparison is highly influenced by a shift towards subscription sales (away from software licenses), recent incentives targeting annual contract value over total contract value, and a go-to-market shift towards OEM partners. With subscription software, revenue is recognized over the full length of a contract rather than at the initial point of sale, which reduces the amount of upfront revenue recognition and thus negatively impacting shares in IDC data. Huawei and Dell Technologies tied* for third in the hyperconverged systems software market with shares of 6.3% and 5.6% respectively. All 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, Q4 2020 (revenue in $M)
Company	4Q20 Revenue	4Q20 Market Share	4Q19 Revenue	4Q19 Market Share	4Q20/4Q19 Revenue Growth
1. VMware	$953.8	38.7%	$938.0	40.9%	1.7%
2. Nutanix	$575.5	23.4%	$616.4	26.9%	-6.6%
T3. Huawei*	$154.5	6.3%	$87.9	3.8%	75.7%
T3. Dell Technologies^a*	$137.4	5.6%	$67.9	3.0%	102.4%
Rest of Market	$641.9	26.1%	$583.2	25.4%	10.1%
Total	$2,463.1	100.0%	$2,293.4	100.0%	7.4%
Source: IDC Worldwide Quarterly Converged Systems Tracker, March 18, 2021