WW Converged Systems Market One More Flat Y/Y in 4Q20 at $4.5 Billion

According to the International Data Corporation‘s Worldwide Quarterly Converged Systems Tracker, WW converged systems market revenue grew 0.2% Y/Y year to $4.5 billion during 4Q20.

“The converged systems market closed out the year with tepid 0.2% Y/Y 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. “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 AsiaPac (excluding China and Japan) as the year came to a close.”

Converged Systems Segments
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 0.1% Y/Y to $1.6 billion in 4Q20, which represented 35.6% of all converged systems revenue. Integrated platforms revenues declined 25.9% Y/Y 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% Y/Y 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 ≠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, WW Hyperconverged Systems as Branded, 4Q20
(revenue in $ million)

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

IDC notes that previous releases of the WW Quarterly Converged Systems Tracker had placed sales of HCI solutions based on VMware’s vSAN ReadyNode program within Other Suppliers. Retroactive through 1Q19, 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’ Y/Y 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, WW Hyperconverged Systems Revenue Attributed to Owner of HCI Software, 4Q20
(revenue in $ million)

Table Notes:
* IDC declares a statistical tie in the worldwide converged systems market when there is a difference of one% or less in the share of revenues or unit shipments among two or more vendors.
a Dell Technologies represents the combined revenues for Dell and EMC sales for all quarters shown.

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.