5 Biggest Hyper-Converged Infrastructure Vendors Entering 2020

CRN breaks down the five most important hyper-converged infrastructure vendors in 2020 and their strategy heading into next year.

The Five Most Important Hyper-Converged Players Next Year

A handful of large and midsize vendors are reaping the benefits of the fast-growing hyper-converged infrastructure market as customers shift toward hybrid cloud and software-defined infrastructure.

“The value proposition of converged infrastructure solutions has evolved to align with the needs of a hybrid cloud world," said Eric Sheppard, research vice president, infrastructure platforms and technologies, at research firm IDC. "Modern converged solutions are driving growth because they allow organizations to leverage standardized, software-defined, and highly automated data center infrastructure that is increasingly the on-premises backbone of a seamless multi-cloud world."

The top three hyper-converged infrastructure vendors in the world generated more than $1.8 billion in hyper-converged system revenue during the first half of 2019 with the market poised to grow even more in 2020.

Here are the five most important hyper-converged infrastructure vendors and their strategies to watch as we head into 2020.

Nutanix’s Transformation

Founded in 2009, San Jose, Calif.-based Nutanix was a hyper-convergence pioneer founded by its passionate leader Dheeraj Pandey. The CEO embarked on a bold mission two years ago to completely transform the business from an HCI appliance specialist into a solely software and subscription company. Nutanix has drastically reduced the amount of hardware it sells and is now focused on giving customers choice to install its software on any major hardware platform.

The strategy is working, Pandey recently told CRN. Subscriptions now make up a whopping 71 percent of Nutanix’s business—on track to exceed the company’s previous goal of 75 percent by the end of calendar 2021—while hardware now accounts for only 4 percent of total revenue. The hyper-converged pioneer is investing heavily in becoming a hybrid cloud heavyweight with innovative software like Calm and the Nutanix Xi suite of cloud services.

Although Nutanix’s stock is down over the past 12 months from approximately $39 in October 2018 to hovering around $24 per share, Pandey told CRN that his company is in it for the long haul. “Nutanix has always stood for taking the short-term pain for the long-term gain,” said Pandey. It will be interesting to see how a completely revamped software-only Nutanix plays out in 2020.

Dell Technologies And VMware Integration Strategy To Heat Up

The worldwide leader in hyper-converged infrastructure, Dell Technologies, has been on a tear over the past two years, consistently leading the world in terms of HCI systems market share. Round Rock, Texas-based Dell, which is also the global leader in servers and storage, currently owns 29.2 percent of the global hyper-converged market, followed by Nutanix at 14.2 percent, according to second-quarter 2019 data from IDC.

Key to Dell’s hyper-converged dominance is its joint engineering work alongside VMware, which is part of the Dell Technologies family. Dell and VMware’s co-engineered offering, VxRail, is the gold standard for hyper-converged systems and the foundation of many of Dell’s most lofty technology platforms.

In recent interviews with CRN, Dell leaders said integration between the two companies will only increase in the future. “[We’re] driving broader levels of integration and innovation across the Dell Technologies estate, while driving our collaboration with our colleagues at VMware and the other Dell Technologies brands and continuing to build more tightly coupled, tightly integrated solutions for our customers so we can drive differentiated advantages at the Dell Technologies level,” said Jeff Clarke, vice chairman, products and operations, for Dell Technologies. With Dell and VMware holding tighter hands around HCI, it will be a difficult task for anyone to overthrow them in 2020.

HPE Teaming Up With Nutanix

For years, Hewlett Packard Enterprise has lagged behind market leaders Dell Technologies and Nutanix, placing third or fouth in terms of global market share. The San Jose, Calf-based company has been implementing technology, such as its InfoSight predictive analytics software, into HPE SimpliVity this year while making strides to extend its HCI footprint into the midmarket.

In one of the biggest hyper-converged partnerships of 2019, HPE said in April that it will be teaming with Nutanix. In October, HPE GreenLake became generally available for Nutanix’s flagship Enterprise Cloud OS software, including its built-in AHV hypervisor. In addition, HPE’s ProLiant DX offering has been preinstalled with Nutanix software.

“For customers that are thrilled and excited and want to move forward with Nutanix, you can now consume that and buy that based on the industry’s most reliable, most manageable, most secure server—the HPE ProLiant and Apollo server lines,” said HPE’s Phil Davis, president of Hybrid IT and chief sales officer. With Nutanix competing against VMware on the software side while Dell and HPE compete on hardware, the new HPE Nutanix strategy appears to be taking direct aim at Dell Technologies in 2020.

Cisco Gaining Traction

The networking giant is gaining more traction in the hyper-converged space through its flagship HyperFlex hyper-converged system. Cisco overthrew HPE in the second quarter of 2019 to take third place in the global HCI market by generating $114 million in revenue, up 47 percent year over year from $78 million.

San Jose, Calif.-based Cisco has consistently been enhancing HyperFlex this year to accommodate a multi-cloud world while doubling down on artificial intelligence and automation. HyperFlex customers are benefiting from one-stop-shop support for Cisco’s networking, servers, storage, management and multi-cloud application life-cycle capabilities. Cisco HyperFlex is enhanced with Intersight, a cloud-based SaaS platform that provides predictive failure analysis, proactive problem-solving and remote edge deployment and management for HyperFlex Edge. Cisco also isn’t shying away from forming hyper-converged technology partnerships with Veeam, Nexenta Systems and many more to boost its market presence. In 2020, Cisco will need to continue its hyper-converged R&D and rapid growth rate to compete with Dell Technologies, HPE and Nutanix.

Possible New VMware vSAN Version In 2020

Led by its flagship vSAN software, VMware is the market leader in terms of hyper-converged infrastructure software. The Palo Alto, Calif.-based virtualization superstar owns 38 percent of the global HCI market from a software ownership point of view, up from 33.7 percent share year over year. HCI systems running VMware’s software represented $694 million in total vendor revenue in the second quarter of 2019, according to IDC. VMware is being closely followed by Nutanix, which took home second place with 28.6 percent share of the HCI software market. VMware’s HCI software assets can be deployed on more than 500 certified x86 platforms.

With over 20,000 customers using vSAN to power their hyper-converged infrastructure, VMware’s latest official version, vSAN 6.7, was launched in 2018. There was no significant vSAN announcement made at VMworld 2019 this year, which means a new version or major enhancement could be in store for 2020. New vSAN innovation might come organically or from one of the slew of companies VMware acquired in 2019 including artificial intelligence specialist BitFusion, software developer Bitnami, Kubernetes star Heptio, Platform as-a-Service and developer Pivotal Software, and software-defined networking and monitoring standouts Avi Networks and Veriflow Systems.