Hyperconverged Infrastructure (HCI) is a hot technology. It has been for the past decade since Nutanix™ took the first mover advantage from the Converged Infrastructure (CI) technology segment and made it pretty much its own … for a while.
But the HCI market (not the technology) is a strange one. It is hot. It is cold. The perennial leader, Nutanix™, has yet to eke out a profitable year. VMware® is strong in the market. Cisco™, which was hot with their HyperFlex solution in 2019, was also stopped short with a dismal decline in the IDC Worldwide HCI 2Q2020 tracker below:
dHCI = Disaggregated or discombobulated?
dHCI is known as disaggregated HCI. The disaggregation part is disaggregated hardware, especially on the storage part. Vendors like HPE® with Nimble Storage, Hitachi Vantara, NetApp® and a few more have touted the disaggregation of the performance and capacity, the separation of storage and compute as a value proposition but through close inspection, it is just another marketing ploy to attach a SAN storage to servers. It was marketing old wine in a new bottle. As rightly pointed out by my friend, Charles Chow of Commvault® quoted in his blog
What was different, but hardly innovative, was really putting an automated analytical storage management wrapper (ahem, spin) around it. Just over a year after the dHCI was hyped, we are now seeing several of these “dHCI” vendors become a spent force.
- Datrium™ which started in the early days touted Open Converged Infrastructure to differentiate itself from HCI, switched to Data Mobility and DR with Automatrix, and in the end, got acquired by VMware® for its DR ware.
- NetApp® has finally admitted defeat, threw in the towel and discontinuing their HCI solution even though they claimed that HCI is dead. That was just a year ago.
The only bucking the trend appears to the HPE® Nimble dHCI but it is too nascent to tell if they are really making a profit. They claimed a 112% revenue growth in 2019-2020, but were also a big loser when they were cutting HCI/dHCI staff a month before the revenue growth announcement.
Smaller niche is profitable?
Signs are pointing to positioning HCI into smaller, niche solutions to be profitable quickly, or at least on track to be profitable.
Fellow blogger and storage consultant, Chris Evans, wrote about Scale Computing transitioning to the path of profitability with more focus in Edge Computing and VDI. And just last week, HPE® has put the Simplivity platform for remote office branch office IT system. Early HCI entrant, Pivot3 has moved to focus on video surveillance appliances.
And Starwind Software has been putting HCI into small medium businesses for years. They also recently their HCA (hyperconverged appliance) for video surveillance and analytics.
Big boys play big
In the big ring, the 2 big contenders are Nutanix™ and VMware®. Both have recorded double digits revenue growth in the past couple of year, but little is known of how soon they can be profitable. VMware® vSAN “profits” are combined with the rest of its other offerings while Nutanix™ is “on the road to profitability“.
The Hot-Cold-Hot-Cold Syndrome
There are so much to comment about this hot-cold-hot-cold HCI market. On one side of the coin, the HCI technology is solid. The values and benefits deploying an HCI solution in a hybrid cloud scenario make perfect sense.
But the HCI market, despite having a hot technology and growing market with a CAGR of 26.1%, does not seem to favour a hot streak of winners. Early entrants like HyperGrid (then GridStore), Nimboxx, Maxta, Atlantis Computing are all gone. Pivot3, Scale Computing, Starwind Software have gone small and niche. Simplivity, one of the best technology and even better than Nutanix in my opinion, has the foster child syndrome at HPE®, leaving Nutanix™ and VMware® to slug it out.
It is indeed a strange one for me.