WW Converged Systems Market Grew Only 0.3% Y/Y in 3Q20

According to the International Data Corporation‘s Worldwide Quarterly Converged Systems Tracker, WW converged systems market revenue grew 0.3% Y/Y to $3.9 billion during 3Q20.

“The overall converged systems market remained resilient in the face of the global pandemic in the third quarter, growing at a relatively flat rate of 0.3% year over year,” said Greg Macatee, research analyst, infrastructure platforms and technologies group, IDC. “The hyperconverged systems market followed a similar trajectory during the quarter with 0.6% Y/Y growth. A handful of geographic regions produced stronger results, most notably in China and Japan, which each grew at double-digit rates. Certified reference systems and integrated infrastructure also grew modestly while integrated platforms declined on a Y/Y basis.”

Converged Systems Segments
IDC’s converged systems market view offers three segments: certified reference systems and integrated infrastructure, integrated platforms, and hyperconverged systems.

The certified reference systems and integrated infrastructure market grew revenues 2.5% Y/Y to $1.4 billion in 3Q20, which represented 36.7% of all converged systems revenue.

Integrated platforms revenues declined 7.7% Y/Y to $438 million in 3Q20. This amounted to 11.2% of total converged systems market revenue. Revenue from hyperconverged systems grew modestly at 0.6% Y/Y during the quarter to $2.0 billion. This represented 52.1% of the total converged systems market.

IDC offers 2 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 table below and rankings based on the owner of the hyperconverged software can be found in the next table.

Top 3 Companies, WW Hyperconverged Systems Revenue Attributed to Owner of HCI Software, 3Q20
(revenue in $ million)

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 $676.8 million in revenue and a 33.2% share. Hewlett Packard Enterprise finished second during 3Q20 with $262.7 million in revenue and a 12.9% share of the market. Nutanix took the number 3 spot with $234.3 million in revenue, which accounted for 11.5% of the market.

Top 3 Companies, WW Hyperconverged Systems as Branded, 3Q20
(revenue in $ million)

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.

Vendor Note
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. As of this deliverable (and 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 $821.1 million in 3Q20 or 40.2% of the total market. Systems running Nutanix hyperconverged software had $512.6 million in vendor revenue during 3Q20 or 25.1% 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.

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 and 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.