HCI Is The Dominant Converged System, Probably For Good
April 5, 2021 Timothy Prickett Morgan
Way back in the dawn of time, all systems were “converged,” meaning that their compute, storage, and networking were embodied in their totality within the same system. These functions were pulled apart and a slew of best-of-breed server, switch, and storage appliances were created and they could be mixed and matched in myriad ways. Some might say in too many ways for the vast majority of IT shops, who don’t have the luxury of bales of money laying around to attract PhDs in computer science.
As distributed computing really took hold in the 1990s, but the 2000s it was clear that there was going to be a need for more integrated systems. And when the server virtualization wave took hold on X86 platforms in the Great Recession, luckily the storage area network – a shared storage utility, swinging the pendulum back towards integrated appliances at least for large scale block storage – was already there. And when you mash up the two by putting virtual storage file systems inside the same fabric as the virtual compute – in the IBM i world, this would be like running the Storwize V7000 software stack inside of PowerVM and spreading it across local storage – you create what is called today hyperconverged storage. (The term converged storage would have sufficed, mind you.)
Of the various kinds of converged systems out there, this type, abbreviated HCI, has become the dominant one, as the data from IDC shown in this chart below makes clear:
In the final quarter of 2020, sales of converged systems overall – some of which only converge compute and networking, others that converge compute, storage, and networking – grew by a barely perceptible two-tenths of a percent to just a tad over $4.5 billion. This included HCI machines but also includes machines called certified reference systems and integrated infrastructure, which means 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 from 2009 and which IBM sold off to Lenovo seven 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.
“The converged systems market closed out the year with tepid 0.2 percent year-over-year growth in the fourth quarter, while the market for the full year 2020 finished down 0.6 percent annually,” said Greg Macatee, research analyst for infrastructure platforms and technologies at IDC, explained in a statement accompanying the figures for the fourth quarter ended in December. “That said, hyperconverged system sales were the market’s main pocket of growth in 4Q20, finishing up 7.4 percent 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.”
IBM does not really have an HCI play, although it has worked with Nutanix to port its server-storage hybrid software to the Power Systems-Linux platform. If you look at HCI by the maker of the software stack, then VMware, which was dragged kicking and screaming into this space (in part because it was owned by SAN juggernaut EMC when Nutanix pioneered this category starting in 2011), is the top supplier, with $953.8 million in sales in the fourth quarter, up 1.7 percent. Dell of course owns both EMC and VMware now, and is playing no favorites when it comes to storage architectures, which is how VMware has gained the pole position in HCI in the past five years. Nutanix actually saw a 6.6 percent slump, dropping to $575.5 million in the period. Huawei Technology, the Chinese IT supplier, posted 75.7 percent growth in the quarter, hitting $154.5 million in sales. Interestingly, Dell and EMC sell other HCI software, and together these two companies accounted for $137.4 million in sales, more than double from the year ago period. The rest of the players in the market comprised 26.1 percent share of the HCI space and rose as a group by 10.1 percent to $641.9 million in sales.
The IBM i platform is not included in the HCI or converged systems numbers, but a credible argument could be made that it should be.
As for the other types of converged systems. The integrated platforms, integrated infrastructure, and certified reference systems are holding more or less steady, with integrated platforms declining a tiny bit each quarter after a sharp drop in early 2016 and a share rise in the other integrated iron at the same time but then a relatively flat revenue profile.