Hyper-Converged Infrastructure Market: Information by Component (Hardware, and Software), Application (Data Center Consolidation, and Disaster Recovery), and Region—Forecast till 2029

Dec 04, 2020   Market Overview Hyper-converged infrastructure (HCI) is a combination of the datacenter hardware using locally attached storage resources with intelligent software to create flexible building blocks. Hyper-converged infrastructure is meant to replace the legacy infrastructure that includes separate servers, storage networks, and storage arrays. Furthermore, its benefits such as lower total cost of ownership, increased performance, and greater productivity are advantageous over the complicated a...
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Report Description

Market Overview

Hyper-converged infrastructure (HCI) is a combination of the datacenter hardware using locally attached storage resources with intelligent software to create flexible building blocks. Hyper-converged infrastructure is meant to replace the legacy infrastructure that includes separate servers, storage networks, and storage arrays. Furthermore, its benefits such as lower total cost of ownership, increased performance, and greater productivity are advantageous over the complicated and expensive legacy infrastructure. Hyper-converged infrastructure runs on turnkey, industry-standard servers. Therefore, software running on each server node distributes all operating functions and enables enterprises to superior performance.

The hyper-converged infrastructure consists of two main components, the distributed plane, and the management plane.The distributed plane is a cluster of nodes that provide storage, virtualization, and networking services for applications.The management plane allows businesses to administer resources from a single location. It also eliminates the need for separate management solutions for servers, storage networks, storage, and virtualization.Modern hyper-converged infrastructure solutions are 100% software-defined, with no dependency on proprietary hardware. The node in a cluster runs a hypervisor,and the control features run as a separate virtual machine, forming a fully distributed fabric.

The Emergence of Hybrid It to Drive the HCI Market Growth

Hybrid IT combines in-house data centers with private/public cloudsto run applications in multiple environments efficiently. IT growth and innovations in hybrid technologies are significantly driving the hyper-converged infrastructure market. Cloud-computing platforms are maturing, and businesses in all industry verticals are adopting the latest technologies. Hybrid IT environments enable organizations to operate workloads between on-premises data centers and cloud platforms for greater flexibility and cost-efficiency. This is bolstering a significant growth in the market recently.

Infield, where the public cloud is not the best fit for specific workloads due to drawbacks such as cost of hosting, compliance concerns, and latency issues, the hyper-converged infrastructure provides a simple solution, i.e., the agility of the cloud with on-premises control and governance.

Digital Transformation Is Thrusting Market Progression

Rapid use of digital technologies to improve business processes and culture to meet customer requirements is propelling hyper-converged infrastructure market growth. Organizations are trying to determine the best way to adopt emerging technologies to keep a competitive edge in their industry. Thus, they adoptan ideal platform such as hyper-converged infrastructures to virtualize core workloads on a consolidated platform and purchase only what they need to operate existing workloads.

Benefits such asstreamliningeveryday IT operations and delivering total-cost-of-ownership (TCO) savings over legacy 3-tier architecturedrive market growth. Servicesoffered by HCI solutions are cost-effective, and resources can be reinvested and dedicated to adopting emerging technologies. Such technologies can be integrated into the HCI environment to create a future-proof platform that global business can rely on.

Limited Resource Optimization Is Restricting the Market Growth

In a recent study conducted by 451 Research, 63% of organizations describe their current workload as highly manual or manual with limited automation tools. This leaves IT departments resource-constrained. These organizations need to be aware of the HCI solutions and their capabilities to empower them with an operational edge.

The high operating expenses of the traditional converged infrastructures are limiting market adoption. It causes IT to spend more time provisioning, integrating, and operating infrastructure and spend less time adding value to the application lifecycle process. However, hyper-converged infrastructuresnot only provide the organizations an opportunity to growbut also efficiently invest in compute, storage, and networking capacity.

Mission-Critical and Next-Generation Workloads to Offer Market Growth Opportunities in the Upcoming Years

Mission-critical workloads are rising in importance owing to the increasing demand for real-time interactions between machines and laborers. Workloads associated with edge computing, internet of things (IoT), big data analytics, artificial intelligence (AI), and machine learning enable the organizations to unlock the economic benefits of their data through actionable. Technology-based workloads also influence business efficiency, cost savings, and competitive advantage.

Modern hyper-converged infrastructural HCI solutions have support latency and scalability to Tier 1 workloads, which is a key factor in boosting market popularity. In edge environments, HCI can also eliminatenecessary storage and compute scalability, and the perpetual fear of network latency,which can be costly for businesses.

Segmental Outlook

Top 3 Companies, Worldwide Hyper-converged Systems as Branded, Q2 2019 (USD Million)

Company

2Q19 Revenue

2Q19 Market Share

2Q18

Revenue

2Q18 Market Share

2Q19/2Q18 Revenue Growth

 

Dell Technologies

533.2

29.2%

418.7

28.4%

27.4%

Nutanix

258.8

14.2%

275.3

18.7%

-6.0%

Cisco

114.0

6.2%

77.7

5.3%

46.8%

Rest of Market

919.1

50.4%

703.8

47.7%

30.6%

Total

1825.2

100.0%

1475.4

100.0%

23.7%

The Software Segment of the Hyper-Converged Infrastructure Market to Hold a Significant Share

A hyper-converged infrastructure's software component includes a hypervisor, software-defined storage solution, and unified management console. The segment had a considerable share in the market in 2019 and is anticipated to continue dominating during the forecast period. The integrated HCI software layer executes theessential data center functions to improve system performance and scalability in production environments. It also addressesthe capacity and performance challenges of businesses.

The hypervisor provides virtualization and abstraction of the underlying hardware and is a crucial part of HCI. The storage solutions ensure application performance, data availability, and flexible scalability, and the unified management interface simplifies monitoring.

The Disaster Recovery Application to Grow at the Highest CAGR during the Forecast Period

Disaster recovery is highly essential to business continuity as datacenter outages may result in substantial losses. Therefore, organizations are switching from traditional backups to virtualized backups solutions to ensure business continuity. Such factors are incrementing the worldwide deployments of HCI solutions for backup/recovery/disaster recovery applications. Organizations are replicating each VM to a backup server. In case of a VM failure, a system administrator can restore the backup instantly, bring the business services back into operation.

Regional Outlook

Asia-Pacific to Account for the Largest Market during the Forecast Period

The Asia-Pacific is expected to offer significant growth opportunities for market investors during the forecast period. Asian Governments are highly investing in ICT infrastructure and modernizing their datacenter architectures to keep up with the service demands.Rising awareness of data management among the growing and increasingly sophisticated populationat a reduced total cost of ownership, growing focus on VDI and server virtualization, and popularity of using infrastructure-as-a-service (IaaS) solutions are driving the market growth in Asia.

Industry experts have estimated the Asia-Pacific cloud computing market to grow at 28.4% annually through 2022due to the rising demands for cloud services, notably supporting big-data analytics initiatives. In addition to this,China, Japan, and India offer favorable economic conditions, numerous end-user verticals, and an increase in the adoption of virtualization environment-based applications, which is a promising factor for the market growth in the region.

North American HCI Market to Grow Substantially over the Next Few Years

The HCI market in North America is anticipated to show promising growth opportunities owing to the presence of key players across the U.S. Nutanix, Inc., Pivot3, Scale Computing, Inc., SimpliVity Corporation, and VMware, Inc., are offering HCI solutions across the financial sector, government organizations, and IT & telecom. These sectors form the major segment of the overall hyper-converged infrastructure market.

Approximately 40% of large and 35% mid-tier organizations in the region are anticipated to shift from the traditional to the hyper-converged infrastructure for cost-saving reasons.Due to their ease of implementation and ability to reduce issues regarding SAN-based storage solutions, virtual desktop infrastructure projects are underway. Organizations dealing with different workloads are demanding hyper-converged infrastructure solutions to diversify their businesses. Such trends are anticipated to expand the use of HCI systems more in the upcoming years.

Recent Developments

  • In May 2020, HPE announced its enhanced HPE SimpliVity 325 Gen 10 HCI with the new 2nd Gen AMD EPYCTM processor. The new solution enablesa remote workforce and delivers a 50% lower cost per virtual desktop. HPE SimpliVity 325 comes with a single CPU processor platform, including all-flash storage. The highly dense solution is ideal for remote office or space-constrained locations. It offers full software capabilities such as guaranteed data efficiency, built-in data protection, and global virtual machine (VM)-centric management and mobility.
  • In March 2019, Huawei, a leading global provider of information and communications technology, partnered with Nutanix, a Computer software company, to build an HCI solution built on Fusion Server 2288H V5, Huawei's 2U dual-socket high-performance server certified by Nutanix.

Industry Participants

Key players in the Global Hyper-Converged Infrastructure market includeDell EMC, Nutanix, Cisco Systems, HPE, Huawei, NetApp, VMware, Pivot3, Scale Computing, Stratoscale, DataCore, Maxta, Microsoft, HiveIO, Supermicro, Hitachi Vantara, Diamanti, Lenovo, NEC Corporation, Riverbed Technology, IBM, Fujitsu, StarWind, Sangfor Technologies, and StorMagic among others.

Hyper-Converged Infrastructure Market: Segmentation

By Component

  • Hardware
  • Software

By Application

  • ROBO
  • VDI
  • Data Center Consolidation
  • Backup/Recovery/Disaster Recovery

Global Hyper-Converged Infrastructure Market:Regions Covered

  • North America
  • Europe
  • Asia-Pacific
  • The Middle East and Africa
  • Central and South America and the Caribbean

Market Overview

Hyper-converged infrastructure (HCI) is a combination of the datacenter hardware using locally attached storage resources with intelligent software to create flexible building blocks. Hyper-converged infrastructure is meant to replace the legacy infrastructure that includes separate servers, storage networks, and storage arrays. Furthermore, its benefits such as lower total cost of ownership, increased performance, and greater productivity are advantageous over the complicated and expensive legacy infrastructure. Hyper-converged infrastructure runs on turnkey, industry-standard servers. Therefore, software running on each server node distributes all operating functions and enables enterprises to superior performance.

The hyper-converged infrastructure consists of two main components, the distributed plane, and the management plane.The distributed plane is a cluster of nodes that provide storage, virtualization, and networking services for applications.The management plane allows businesses to administer resources from a single location. It also eliminates the need for separate management solutions for servers, storage networks, storage, and virtualization.Modern hyper-converged infrastructure solutions are 100% software-defined, with no dependency on proprietary hardware. The node in a cluster runs a hypervisor,and the control features run as a separate virtual machine, forming a fully distributed fabric.

The Emergence of Hybrid It to Drive the HCI Market Growth

Hybrid IT combines in-house data centers with private/public cloudsto run applications in multiple environments efficiently. IT growth and innovations in hybrid technologies are significantly driving the hyper-converged infrastructure market. Cloud-computing platforms are maturing, and businesses in all industry verticals are adopting the latest technologies. Hybrid IT environments enable organizations to operate workloads between on-premises data centers and cloud platforms for greater flexibility and cost-efficiency. This is bolstering a significant growth in the market recently.

Infield, where the public cloud is not the best fit for specific workloads due to drawbacks such as cost of hosting, compliance concerns, and latency issues, the hyper-converged infrastructure provides a simple solution, i.e., the agility of the cloud with on-premises control and governance.

Digital Transformation Is Thrusting Market Progression

Rapid use of digital technologies to improve business processes and culture to meet customer requirements is propelling hyper-converged infrastructure market growth. Organizations are trying to determine the best way to adopt emerging technologies to keep a competitive edge in their industry. Thus, they adoptan ideal platform such as hyper-converged infrastructures to virtualize core workloads on a consolidated platform and purchase only what they need to operate existing workloads.

Benefits such asstreamliningeveryday IT operations and delivering total-cost-of-ownership (TCO) savings over legacy 3-tier architecturedrive market growth. Servicesoffered by HCI solutions are cost-effective, and resources can be reinvested and dedicated to adopting emerging technologies. Such technologies can be integrated into the HCI environment to create a future-proof platform that global business can rely on.

Limited Resource Optimization Is Restricting the Market Growth

In a recent study conducted by 451 Research, 63% of organizations describe their current workload as highly manual or manual with limited automation tools. This leaves IT departments resource-constrained. These organizations need to be aware of the HCI solutions and their capabilities to empower them with an operational edge.

The high operating expenses of the traditional converged infrastructures are limiting market adoption. It causes IT to spend more time provisioning, integrating, and operating infrastructure and spend less time adding value to the application lifecycle process. However, hyper-converged infrastructuresnot only provide the organizations an opportunity to growbut also efficiently invest in compute, storage, and networking capacity.

Mission-Critical and Next-Generation Workloads to Offer Market Growth Opportunities in the Upcoming Years

Mission-critical workloads are rising in importance owing to the increasing demand for real-time interactions between machines and laborers. Workloads associated with edge computing, internet of things (IoT), big data analytics, artificial intelligence (AI), and machine learning enable the organizations to unlock the economic benefits of their data through actionable. Technology-based workloads also influence business efficiency, cost savings, and competitive advantage.

Modern hyper-converged infrastructural HCI solutions have support latency and scalability to Tier 1 workloads, which is a key factor in boosting market popularity. In edge environments, HCI can also eliminatenecessary storage and compute scalability, and the perpetual fear of network latency,which can be costly for businesses.

Segmental Outlook

Top 3 Companies, Worldwide Hyper-converged Systems as Branded, Q2 2019 (USD Million)

Company

2Q19 Revenue

2Q19 Market Share

2Q18

Revenue

2Q18 Market Share

2Q19/2Q18 Revenue Growth

 

Dell Technologies

533.2

29.2%

418.7

28.4%

27.4%

Nutanix

258.8

14.2%

275.3

18.7%

-6.0%

Cisco

114.0

6.2%

77.7

5.3%

46.8%

Rest of Market

919.1

50.4%

703.8

47.7%

30.6%

Total

1825.2

100.0%

1475.4

100.0%

23.7%

The Software Segment of the Hyper-Converged Infrastructure Market to Hold a Significant Share

A hyper-converged infrastructure's software component includes a hypervisor, software-defined storage solution, and unified management console. The segment had a considerable share in the market in 2019 and is anticipated to continue dominating during the forecast period. The integrated HCI software layer executes theessential data center functions to improve system performance and scalability in production environments. It also addressesthe capacity and performance challenges of businesses.

The hypervisor provides virtualization and abstraction of the underlying hardware and is a crucial part of HCI. The storage solutions ensure application performance, data availability, and flexible scalability, and the unified management interface simplifies monitoring.

The Disaster Recovery Application to Grow at the Highest CAGR during the Forecast Period

Disaster recovery is highly essential to business continuity as datacenter outages may result in substantial losses. Therefore, organizations are switching from traditional backups to virtualized backups solutions to ensure business continuity. Such factors are incrementing the worldwide deployments of HCI solutions for backup/recovery/disaster recovery applications. Organizations are replicating each VM to a backup server. In case of a VM failure, a system administrator can restore the backup instantly, bring the business services back into operation.

Regional Outlook

Asia-Pacific to Account for the Largest Market during the Forecast Period

The Asia-Pacific is expected to offer significant growth opportunities for market investors during the forecast period. Asian Governments are highly investing in ICT infrastructure and modernizing their datacenter architectures to keep up with the service demands.Rising awareness of data management among the growing and increasingly sophisticated populationat a reduced total cost of ownership, growing focus on VDI and server virtualization, and popularity of using infrastructure-as-a-service (IaaS) solutions are driving the market growth in Asia.

Industry experts have estimated the Asia-Pacific cloud computing market to grow at 28.4% annually through 2022due to the rising demands for cloud services, notably supporting big-data analytics initiatives. In addition to this,China, Japan, and India offer favorable economic conditions, numerous end-user verticals, and an increase in the adoption of virtualization environment-based applications, which is a promising factor for the market growth in the region.

North American HCI Market to Grow Substantially over the Next Few Years

The HCI market in North America is anticipated to show promising growth opportunities owing to the presence of key players across the U.S. Nutanix, Inc., Pivot3, Scale Computing, Inc., SimpliVity Corporation, and VMware, Inc., are offering HCI solutions across the financial sector, government organizations, and IT & telecom. These sectors form the major segment of the overall hyper-converged infrastructure market.

Approximately 40% of large and 35% mid-tier organizations in the region are anticipated to shift from the traditional to the hyper-converged infrastructure for cost-saving reasons.Due to their ease of implementation and ability to reduce issues regarding SAN-based storage solutions, virtual desktop infrastructure projects are underway. Organizations dealing with different workloads are demanding hyper-converged infrastructure solutions to diversify their businesses. Such trends are anticipated to expand the use of HCI systems more in the upcoming years.

Recent Developments

  • In May 2020, HPE announced its enhanced HPE SimpliVity 325 Gen 10 HCI with the new 2nd Gen AMD EPYCTM processor. The new solution enablesa remote workforce and delivers a 50% lower cost per virtual desktop. HPE SimpliVity 325 comes with a single CPU processor platform, including all-flash storage. The highly dense solution is ideal for remote office or space-constrained locations. It offers full software capabilities such as guaranteed data efficiency, built-in data protection, and global virtual machine (VM)-centric management and mobility.
  • In March 2019, Huawei, a leading global provider of information and communications technology, partnered with Nutanix, a Computer software company, to build an HCI solution built on Fusion Server 2288H V5, Huawei's 2U dual-socket high-performance server certified by Nutanix.

Industry Participants

Key players in the Global Hyper-Converged Infrastructure market includeDell EMC, Nutanix, Cisco Systems, HPE, Huawei, NetApp, VMware, Pivot3, Scale Computing, Stratoscale, DataCore, Maxta, Microsoft, HiveIO, Supermicro, Hitachi Vantara, Diamanti, Lenovo, NEC Corporation, Riverbed Technology, IBM, Fujitsu, StarWind, Sangfor Technologies, and StorMagic among others.

Hyper-Converged Infrastructure Market: Segmentation

By Component

  • Hardware
  • Software

By Application

  • ROBO
  • VDI
  • Data Center Consolidation
  • Backup/Recovery/Disaster Recovery

Global Hyper-Converged Infrastructure Market:Regions Covered

  • North America
  • Europe
  • Asia-Pacific
  • The Middle East and Africa
  • Central and South America and the Caribbean