Dell Technologies, per usual, won the No. 1 spot in IDC’s quarterly market tracker for branded hyperconverged infrastructure (HCI) systems, followed by rising star Hewlett Packard Enterprise’s (HPE), which saw fourth-quarter HCI revenue growth swell 25.4% and cushion its lead over Nutanix, who, for the third consecutive quarter saw a double-digit revenue decline.    

IDC’s quarterly converged systems tracker ranks HCI suppliers in two ways: by the brand of the hyperconverged system and by the owner of the software that provides the core hyperconverged capabilities.

By brand, Dell remained the largest supplier in Q4 with $802 million in revenue and a 33.6% market share. The Round Rock, Texas-based company had a strong quarter as revenue increased 11.1% compared to the same quarter in 2019.

HPE has been throwing its weight into HCI edge computing, and it’s paying off. The vendor generated $332 million in HCI systems sales for the quarter, increasing its global market share from 11.5% in the fourth quarter of 2019, to 13.5% in Q4 2020.

Nutanix, meanwhile, as it continues its transition to a software-only vendor, dropped to the No. 3 spot in the fourth quarter of 2020, and saw its branded-box revenue fall from $313 million in the fourth quarter of 2019, to $254 million in last quarter of 2020. It's worth noting, however, that both Dell and HPE run Nutanix and VMware hyperconverged software on their servers.

When it ranked the vendors in terms of the HCI systems’ software brand, VMware came out on top. New systems running VMware’s HCI stack delivered $953.8 million in revenue during Q4, or 38.7% of the total market. 

Systems running Nutanix hyperconverged software scored $575.5 million in vendor revenue during the quarter, or 23.4% of the total market — a 6.6% revenue decline compared to Q4 2019.

Huawei and Dell Technologies were in a statistical dead heat for the No. 3 spot in the latest ranking. Huawei generated revenues of $154.5 million for the quarter, which was a 75.7% year-over-year increase and good for a 6.3% market share. Dell generated $137.4 million in revenues, which was a staggering 102.4%  year-over-year growth rate and 5.6% share of the market. 

These revenue and market share figures include the value of all HCI hardware, HCI software, and system infrastructure software sold, regardless of its hardware brand. And, IDC notes, that because hardware sales are a big factor in the data, “the chart should not be assumed to solely reflect, or completely align with, the respective companies’ overall software performance.”

While HPE, VMware, Dell Technologies, and Huawei grew their revenue during the quarter, the overall HCI and larger converged systems market remained relatively flat in Q4. The worldwide converged systems market revenue grew 0.2% year over year to $4.5 billion, while the revenue from hyperconverged systems grew 7.4% year over year to $2.5 billion.

As Dell Technologies owns 81% of VMware, it’s safe to say that Dell Technologies came out on top in both rankings.

"The number one workload run on HCI has been and still is VMware vSphere and this gives Dell a distinct advantage as they have done a great job of keeping their product evolution in lockstep with VMware," said Zeus Kerravala, principal analyst at ZK Research. "It was a late comer to the HCI market but it's leveraged the common ownership to make it a "no brainer" for VMware customers to look to Dell first."

While Dell posted impressive revenue and market growth, HPE has been aggressive in targeting its rival.  

Earlier this month, HPE updated its HCI SimpliVity product with HPE Cloud Volumes Backup to provide backup directly to the cloud from multiple edge sites in three clicks or via policy automation from VMware’s vCenter without additional backup software or hardware infrastructure required. The news broke the same day that the infrastructure vendor reported stronger-than-expected financial results for its first fiscal quarter of 2021. 

Nutanix, for its part, has been in an ongoing transition to a software-only business model. This will be paramount in strengthening its position in the market as Nutanix recognizes revenues over the lifetime of the contract and not at the point of sale. 

"There's a bigger issue here though," Kerravala said. "The HCI market has matured and customers are making purchases of the technology as part of a larger suite of products. Dell and HPE can deliver much broader portfolios leaving Nutanix on the outside looking in. Looking ahead, I expect to see Dell continue to stretch its lead in HCI."