Recent market studies from IDC and 451 show how critical the core HCI software is to the fast-growing HCI market, and VMware vSAN is leading the market. In IDC’s 2Q 2017 Worldwide Quarterly Converged Systems Tracker, the total value of hyperconverged solutions running VMware vSAN accounted for 33.3% of 1H2017 HCI market revenue, making HCI systems powered by vSAN the largest portion of the hyperconverged systems market.
The recognition of HCI as a software market has been rapidly building among the analyst community. While HCI can be delivered in either appliances or as servers plus software, the software contribution has increasingly taken hold as the core value of the space. The software business model allows customers to independently deploy best-in-class software and hardware solutions. In addition, they can have a plug-and-play model to consume the latest software and hardware innovation.
At VMware, we’ve always believed software was the future of HCI—just like what we saw in the hypervisor market years ago—and we are now seeing strong validation from analysts in the HCI industry.
IDC Data Shows VMware vSAN is Driving HCI Market Expansion and Strong Overall Market Growth
As mentioned above, according to IDC's 2Q2017 Worldwide Quarterly Converged Systems Tracker, hyperconverged solutions running VMware vSAN accounted for 33.3% of 1H2017 HCI market revenue, making VMware—a 100% software company—the largest HCI software vendor in the market. That 33.3% market share of HCI systems included VMware vSAN sold on servers through the vSAN ReadyNode™ program, a program with 14 different server ecosystem partners, and as fully integrated HCI appliances, like the Dell EMC VxRail appliances.
VMware’s emergence as the HCI leaders has been driven by 8 quarters now of over 150% year-over-year growth in VMware vSAN bookings. In IDC’s 2Q2017 Worldwide Quarterly Converged Systems Tracker, IDC measured impressive growth for overall HCI vendor revenue and for VMware vSAN in particular. According the to the IDC data, HCI vendor revenue grew 48.5% year-over-year during the second quarter, while vendor revenue from HCI solutions running VMware vSAN grew more than 131% YoY—or 2.7x faster than the total market during the same quarter.
And if you drill into the various HCI software offerings, the IDC data reveals additional information about the VMware business. According to the IDC data, VMware vSAN software accounted for 40.7% of all 1H2017 hyperconverged software revenue, which was the largest share of any vendor during that period. At VMware, we believe that shift to a software-first business model is important to not only drive differentiation today but to also deliver on future customer needs.
451 Research Reiterates the Software Value of HCI
In another validation of the shift to software, 451 Research recently completed their Voice of the Enterprise research, which tracks the disruption occurring in the market. This recently completed research includes over 325 worldwide quarterly web surveys and 64 individual conversations during September and October 2017.
451 Research asked customers “Which of the following vendors is your organization currently using for its HCI?”. While the sample size was admittedly small, the survey represented customers with over $100M in revenue and put VMware vSAN as the leading deployed HCI solution at 47.5%, more than any other HCI solution.
It was also interesting to note that 451 Research found that 51% of respondents are currently undergoing IT Transformation. The important transformation goals for these customers are: quicker response times, reduced costs, improved reliability/availability, improved security and expand/deploy new capacity, and it’s no surprise that these goals align very well with the benefits achieved from hyper-converged infrastructure.
To learn more about 451 Research Voice of the Enterprise Servers and Converged Infrastructure survey, check out this PDF document.
The Benefits of a Software Business to HCI
It has been fun to watch the HCI market evolve to one that is fundamentally driven by software. VMware has been a believer in this shift since the beginning, and over the past few quarters we have seen other traditional HCI vendors follow suit with an expansion of their software business, a focus on new hardware partnerships, and an emphasis on the growth of their software-only business.
We believe HCI’s shift to a software business has some important implications for our customers:
- Accelerated innovation from software flexibility: Vendors can rapidly respond to customer needs by quickly delivering new software features and by immediately adopting independent hardware innovations, such as new flash and CPU technologies, from the rich partner ecosystem. As an example, VMware’s fast-pace of innovation has resulted in releases every six months with vSAN, and now every three months with VMC. This is a big change from legacy storage releases that have traditionally been 18-36 months apart.
- Vendors focus on strong partner ecosystems: An open, software-based platform places a premium on strong partnerships as hardware lock-in disappears and customers have greater choice between different industry-standard server platforms and vendors. VMware’s investment in the vSAN ReadyLabs™ is one example of this that allows us to deliver appliance-like experiences with the flexibility of hardware choice. A strong ecosystem also enables server vendors to enable HCI solutions on different server platforms to address new and different applications.
- Simplify extension to the public cloud: As customers shift some workloads to public clouds, like AWS, a software-based approach is the only way to ensure a consistent environment from on-premises to the public cloud, where it’s almost impossible to ensure the same hardware infrastructure between the two locations. This type of flexibility, like what is available today with VMware Cloud on AWS, helps extend HCI to the cloud without requiring new skillsets or application refactoring—the lift-and-shift approach to workloads can be a reality.
HCI Growth Just Getting Started
While we are excited about the over 10,000 organizations that have made VMware vSAN part of their data center modernization initiatives, the adoption of HCI is just starting as it shifts to a software business. Looking ahead, IDC forecast projects a 28.9% CAGR for WW HCI market between 2016 and 2021, when the total market value is projected to reach nearly $8.3B.
VMware is focused on continuing to drive innovation in vSAN and to continue to grow our leadership in the HCI space. As a result of that work, we are excited to report that vSAN 6.6 was named a winner in the 2017 Product of the Year Awards in the Software-Defined Storage category for the Technology subcategory. CRN’s annual Products of the Year Awards are given to standout products and services that represent best-in-breed technological innovation backed by a supportive channel partner program. This year, the winners were determined through a combination of editorial selection and a survey fielded to solution providers to accurately capture real-world satisfaction among partners and their customers. Additional winning information can be found here.
If you have not had a chance to dig into the details of vSAN yet, you can get started today with the vSAN 6.6 Hands-on Lab. It’s risk free, easy and requires no installation.