LONDON — The global market for software defined storage (SDS) and servers in hyperconverged infrastructure (HCI) is set to expand to more than $60 billion in 2023, up from $11 billion in 2019.

The software-defined storage (SDS) appliance segment is expected to represent the biggest share of revenue of the HCI market by 2023, according to Omdia. Organizations purchase HCI solutions based on metrics including simplicity of deployment, ease of management, scalability to meet demand and conformance with current operational process. Because of this, Omdia has launched the IT Ecosystem & Operations Intelligence Service , which compares vendors of both hardware- and software-based HCI solutions as an integrated bundle.

Major findings from the report include:

• The separation between the leaders and challengers in the HCI solutions market was a maximum of 1.2 standard deviation on average, demonstrating that the HCI market is differentiated by a number of small features and capabilities.
• Cisco, Dell, NetApp and VMware were classified as leaders because they recorded more than 60 percent of sub-category scores above the cohort average compared to challengers with less than 50 percent.
• No significant differences were found between the software-based and hardware-based approaches to HCI. The purchasing decision is one of customer preference rather than technical superiority.

How HCI is creating a disturbance in the market

Omdia believes the true environment is multi-modal, rather than a cloud vs. on-premises discussion, as the architecture needed for delivering modern services will require a mixture of approaches based on different criteria such as latency, data sovereignty and scale. HCI sits at the crossroads of these architectures and enables the choice of approach to be selected based on need, with the added flexibility to support a build or buy approach based on the organization’s preferences.

Omdia considers the evaluation of HCI must therefore consider the wider aspects of how to understand the value IT brings to any organization, including edge, on-premises private cloud, core public cloud and hybrid and multi-cloud strategies.

The market remains immature, but leadership is forming

Any vendor in this report could be considered a candidate for selection or short-listing depending on the requirements of the customer. The diagram below shows the difference between the solutions remains relatively small with the standard deviation between the leader to the lowest ranked vendor being just over 1.2 in the unweighted average.

HCI is differentiated by the application of capabilities that meet the customer’s requirements, rather than the capability itself.

“The other clear observation is that the difference between a hardware or software approach to HCI does not show one is better than the other,” said Roy Illsley, chief analyst, IT & enterprise, at Omdia. “The conclusion is that HCI is a flexible and evolving market that currently provides a strong consistent approach to delivering the capability to customers. As edge computing expands, the HCI market will become more diverse in the capabilities as support for the cloud-native and AI/ML workloads expand.”

Right now, little sets the leaders apart

The leaders are separated into two clear groups; Cisco, Dell, and VMware representing the leading three vendors with very little difference between them—and NetApp representing a fourth leader slightly separated from this leading group. The scoring is very close and indicates that while there are three clear leaders, HCI remains a market that in terms of capability is differentiated by more than just the technical features. HCI is a compound of the ecosystem, technology, and how well the solution meets the customer’s requirements. This will change as the use cases become more diverse, which will drive a greater degree of variation in the HCI solutions in the future.

The difference between the vendors has seen the emphasis shift from purely cost reduction to increased agility and flexibility.

“The HCI market evolved from the need to simplify the deployment of infrastructure and software on-premises for use case such as deploying VDI technologies cost effectively,” Illsley said. “It has expanded its remit to address the wider question of an organization’s journey to cloud computing by enabling the organization to remain in control of where and at what pace the move to cloud happens. This extended remit will become even more diverse as HCI becomes a key element in the move to adopt edge computing and AI at the edge in 2021 and beyond.”

Introducing Omdia’s IT Ecosystem & Operations Intelligence Service

Omdia’s newest intelligence service is built on the deep subject matter expertise within the cloud and data center research practice, combined with the expertise of leading global analyst, Roy Illsley, chief analyst at Omdia.

The service will explore planned IT spending over the next three to four years around data-center technology, IT operations and cloud. The objective is to help vendors understand where to target messaging and their product investment plans and to help IT decision makers to determine where they should be looking at placing technology investments. The new service will include a focus on the cloud migration story and will include data on the migration of workloads to the cloud, by the type of cloud environment, with a forecast of this migration for the next 18 months. This level of information will provide subscribers with information by workload type as well as geographic and market vertical perspectives.