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Dell, VMware likely held HCI revenue share leads

While IDC probably won’t release its hyper-converged market share numbers for the first quarter until late June, it appears Dell will stay No. 1 on the HCI revenue hardware and software charts.

IDC recognized hardware and software HCI revenue separately for the first time in the fourth quarter of 2017. Dell EMC led hardware with 27.8% share, ahead of second-place Nutanix at 19.5%. IDC recognized Dell-owned VMware as the software HCI market leader with 32.4% of the market, with No. 2 Nutanix at 29.5%.

Nutanix, which is switching to a software-centric business model, reported 41% revenue growth for the first quarter of 2018. Dell said its Dell EMC VxRail HCI appliance and VMware’s vSAN HCI software each grew more than that.

VMware reported vSAN licenses grew 70% year-over-year, including vSAN sold on Dell EMC vXRail appliances.

On VMware’s earnings call, last week CEO Pat Gelsinger said the company finished the quarter with over 14,000 vSAN accounts, and its 10 largest deals included vSAN.

Like Nutanix CEO Dheeraj Pandey, Gelsinger said he still sees plenty of room for growth in the HCI market.

“I tease my team saying, ‘how many vSpheres have storage attached to it?’” The answer is 100%,” Gelsinger said. “And I’d say ‘that’s your market opportunity for vSAN, 100% of vSphere attach rate.’ So I am pushing them to continue to make it that simple and easy that we are attaching vSAN to every one of our compute nodes as part of this larger migration to the complete solution, either software or software plus hardware.”

Gelsinger said that migration is well under way as VMware customers have gone from licensing vSAN separately to using it as part of complete HCI bundles such as VxRail. Those HCI packages often include NSX software-defined networking.

“So that’s the shift in the marketplace we are seeing, where I will say people are no longer putting the Tinker Toys together themselves,” he said. “So, the storage piece by itself is a large market that we have lots of growth to go yet.”

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