The Converged Systems Conundrum
September 21, 2020 Timothy Prickett Morgan
The idea behind converged and hyperconverged systems was one that AS/400 and IBM i shops have long been familiar with, but which customers using other systems had become unfamiliar with or had never known as they adopted other systems for their mission critical systems. It’s so simple that it can be expressed in one word: integration. Yes, that’s the i in IBM i, and while this is the hallmark of the System/38, the System/36, and the AS/400 platforms from decades ago, ironically the IBM i platform is not considered a converged or hyperconverged platform by the market researchers at IDC.
Nonetheless, we keep an eye on the converged and hyperconverged systems space, and the money that is being spent here and there in different segments, so we can gauge the appetite for these specialized systems – they are more than just machines, but they are still something less than the fully integrated Power Systems-IBM i platform, which includes a server, operating system, database, middleware, and development tools all wrapped up in a single package.
As I have said before, some definitions are in order so we all know what IDC is talking about. In the early days, a converged system was one that simply brought serving and networking into a single hardware system, a revolution that Cisco Systems started in March 2009 as the Great Recession was roaring with its “California” Unified Computing System blade servers. IDC has co-opted this term to make it mean something much broader than it originally meant. Hyperconverged infrastructure, or HCI, means taking a cluster of virtualized systems and running a virtualized storage area network on the same cluster on which virtual machines supporting applications are running. Nutanix and VMware are the dominant suppliers here and have been for many years. But there is a new sub-category of hyperconverged storage that has come into the market, what IDC calls disaggregated hyperconverged, where the storage is on a separate appliance from NetApp, Dell EMC, IBM, or Pure Storage. By breaking storage free from the nodes, compute and storage can be scaled independently from each other – one of the big drawbacks of earlier hyperconverged systems.
Broadly speaking, certified reference systems and integrated infrastructure is comprised of machinery that has compute, storage, networking, and system management all woven together and ready to deploy – think of IBM’s FlexSystem machines that were inspired by the Cisco UCS machines and which IBM sold off to Lenovo six years ago. Integrated platforms add layers of systems software and sometimes application software on top of that, such as Oracle’s Exadata systems or IBM’s now defunct PureApplication platforms. The way IDC does the math on these systems, the whole system is counted as one thing and it does not track individual compute or storage nodes. This is how people talk about these systems within their companies, so that makes sense. (Just like the main frame came to mean the whole complex of machines, in their own frames, five decades ago with the IBM System/360.)
With that out of the way, let’s talk some numbers here. To start with, let’s give you some annualized data in tabular form, compliments of the box counters over at IDC.
That’s so you can see the numbers on an annualized basis, and the shift from integrated platforms over to hyperconverged is very obvious, as is the fact that growth has continued across all classes of converged systems. Here is the quarterly trend data back to the third quarter of 2014, the first quarter where IDC started talking about this market in this fashion:
In the second quarter, according to IDC, sales of converged systems across all classes declined by 4.5 percent to $3.94 billion. Sales of integrated platforms continued their slide, falling 13.1 percent year on year to $544 million. Integrated infrastructure and certified reference platforms together comprised $1.54 billion in sales, down 7.5 percent from the second quarter of 2019. The 1.1 percent growth in hyperconverged infrastructure, to $1.86 billion, was not enough to offset the declines in these two other areas, and hence the overall decline for converged systems in general.
For the first six months of the year, the overall market for converged systems was off 1 percent to $7.82 billion. While HCI system sales have risen by 5 percent in the first half, we are a long way from triple digit and even double digit growth here. And it is reasonable to surmise that sales of other kinds of converged systems will continue to decline.
At this point, sales of raw components – servers, storage servers, switching, and the systems software that goes into making virtualized, distributed computing and sometimes storage systems – is larger than for systems that bring some or all of these together in some fashion and put them all under one price tag. It would take a long time to figure it out, but our best guess is that converged systems as a class comprise somewhere between 10 percent and 15 percent of total sales of servers, storage, and switching all combined and with overlaps removed. But, we admit, this is but a guess. Our point is this: Converged systems are nowhere near to being the normal way to buy IT infrastructure, and it is reasonable to wonder if they can grow much until HCI comprises most of the sales and can somehow get some kind of second or third wind in the datacenter.