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    Worldwide Converged Systems Saw 9 Percent Revenue Increase in 2017

    By
    Chris Preimesberger
    -
    April 4, 2018
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      Data.center.storage

      More and more enterprises might be moving portions of their IT systems to cloud-based subscription-economy services, but there’s still a lot of hardware being bought and put into operation around the world.

      Industry analyst International Data Corp. reported April 3 in its Worldwide Quarterly Converged Systems Tracker that worldwide market revenue in that sector increased 9.1 percent year over year to $3.6 billion during the fourth quarter of 2017.

      Full-year sales surpassed $12.5 billion, representing a 9.4 percent increase over the previous year and the first time the market surpassed $12 billion in a calendar year.

      “The number of organizations deploying converged systems continued to expand through 2017,” said Eric Sheppard, IDC Research Vice-President of Enterprise Servers and Storage. “This drove the total market value past $12.5 billion for the year. While not all market segments increased during the year, those that did grow were able to provide considerable benefits related to the most core infrastructure challenges facing today’s data centers.”

      Defining the Converged-Systems Segments

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

      The certified reference systems and integrated infrastructure market generated $1.7 billion in revenue during the fourth quarter, which represents a 3.4 percent year-over-year decline and 47.1 percent of the total converged systems market value.

      Dell EMC is No. 1 Seller

      Dell EMC was the largest supplier in this market segment with $735.0 million in sales and a 42.9 percent share. Cisco/NetApp generated $565.6 million in sales, which was the second-largest share at 33.0 percent. Hewlett-Packard Enterprise generated $289.3 million in sales and captured 16.9 percent market share.

      Revenue from hyperconverged systems sales grew 69.4 percent year over year to $1.25 billion during the fourth quarter of 2017. This amounted to 34.3 percent of the total converged systems market. Full-year sales of hyperconverged systems surpassed $3.7 billion in 2017, up 64.3 percent from 2016.

      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.

      In the branded solution view, Dell EMC was the largest supplier in this market segment with $346.8 million in revenue and a 27.8 percent share. Nutanix generated $243.0 million in revenue with the second largest share of 19.5 percent. HPE and Cisco Systems were statistically tied  for the quarter, with $61.6 million and $56.3 million in revenue and 4.9 percent and 4.5 percent market share, respectively.

      VMware Leads in HCI Software Platforms

      On the basis of HCI software, systems running VMware’s hyperconverged software represented $405.1 million in fourth-quarter vendor revenue, or 32.4 percent of the total market segment. Systems running Nutanix’s hyperconverged software contributed $368.4 million in fourth quarter vendor revenue, or 29.5 percent of the total market segment. Both values represent all software and hardware, regardless of how it was ultimately branded.

      Integrated platforms sales declined a significant 18.1 percent year over year during the fourth quarter of 2017, generating revenues of $675.5 million. This amounted to 18.6 percent of the total converged systems market value. Oracle was the top-ranked supplier of integrated platforms during the quarter, generating revenues of $360.5 million and capturing a 53.4 percent share of the market segment.

      Avatar
      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 16 years and more than 5,000 articles at eWEEK, he has distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.

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