Will The Real HCI Market Leader Please Stand Up?

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IDC recently published its latest market share statistics for “Converged Infrastructure,” which includes the rapidly-growing hyperconverged infrastructure (HCI) market as a distinct category. Headlines are touting that Dell is now #1 in HCI. But do those headlines tell the real story of a complicated market with many complex partnerships?

Much of Dell’s HCI revenue actually comes from the sale of Nutanix software – by way of Dell EMC XC Series appliances (“Nutanix OEM”). These are Dell PowerEdge servers that ship with Nutanix software pre-installed. Dell XC is 100% Nutanix software running on Dell hardware — 100%!

So, this begs the question, “what are the real HCI market share statistics?” What does the market look like if Nutanix gets credit for all Nutanix-powered HCI solutions, hardware and software? You can actually calculate this using data from the same IDC report.

The less-than-surprising result: Nutanix remains the clear #1 HCI market share leader. For the latest reported quarter, Q2 2017, total Nutanix sales were approximately 46% greater than Dell. Put another way, Nutanix’s HCI market share outpaces that of Dell by a full 10 points. Again, this is straight IDC data. No assumptions. No estimates.

To their credit, Dell has been forthcoming about the major contribution the Nutanix OEM product makes to its overall HCI business. In an interview with TechTarget, Dan McConnell, Dell’s vice president of converged platforms, said that the XC Series has generated more than $100M in revenue for Dell in the second quarter. The article later estimates that “…Dell EMC’s overall HCI revenue would be around $220 million.” In short, nearly half of the business is Nutanix software-driven, which is consistent with our own understanding.

Dell is a great partner, and we’re happy that Nutanix software is fueling Dell’s hardware business and driving some amazing customer wins including the FBI and Nasdaq. Both companies are transforming the IT market with innovative software-driven HCI solutions. And most importantly, we look forward to our continued partnership in supporting our customers on their digital initiatives. Here’s to our continued mutual success!