Nutanix beat VMware to win 47.8% of the hyperconverged infrastructure (HCI) software market, representing $206 million in revenue, for the fourth quarter of 2018, according to Gartner’s latest numbers.
Gartner puts VMware in the No. 2 spot for HCI software, with $190 million in revenue and 44.1% market share — about a month after IDC’s HCI market tracker for the same quarter put VMware at the top of the list.
The two popular vendors compete vigorously for customers and market share, and sometimes that battle spills over into blogosphere as it did earlier this year with VMware COO Sanjay Poonen accusing Nutnix of launching a “frontal attack on both VMware and Dell,” and Nutanix CEO Dheeraj Pandey accusing VMware of “bullying” customers.
Both analyst firms use different methodologies when it comes to calculating revenue.
The Gartner revenue numbers include HCI software-only revenue, noted analyst Naveen Mishra. For Nutanix, this means it excludes appliance revenue (the vendor is transitioning to a software-only business model), he explained. Gartner also gives Nutanix and VMware credit for software revenue from HCI partnerships they have with original equipment manufacturers (OEMs) and hardware providers — for example, VMware provides the software for the Dell EMC-branded VxRail HCI product line.
However, Gartner notes that for VMware, the economic value of HCI software is higher than what is reflected in the quarterly figures because Dell EMC also captures some of the software revenue.
VMware’s Narrowing the Gap
Nutanix has held Gartner’s top HCI software vendor ranking for the last few quarters said Mishra. In the third quarter of 2018, Nutanix scored 51.4% of the market and reached $200.8 million in revenue.
“But the most interesting piece you will find is that in Q4 the gap between Nutanix and VMware has narrowed. That’s interesting as compared to earlier quarters,” Mishra said. He credited this to the success of VxRail, which “performed very well and exceeded some of the market expectations. That helped VMware look good.”
But, he added, “Nutanix is still the No. 1 and we should not get carried away.”
“We’re pleased to see Gartner yet again provide a view of the market that’s in line with our experience talking to customers and partners,” said Greg Smith, VP of product and technical marketing at Nutanix in an email. “Gartner has consistently called out Nutanix as leading this market by share, proving that customers enthusiastically demand our best-in-class Enterprise Cloud Software. We continue to invest in focusing on real customer problems, not bundling older products in an attempt to protect market share and offering our customers excellent customer support.”
VMware declined to comment.
IDC’s Quarterly Tracker
IDC, meanwhile, ranks technology suppliers within the hyperconverged systems market two ways: by the brand of the hyperconverged solution and by the owner of the software providing the core hyperconverged capabilities.
As it relates to the branded view of the hyperconverged systems market, Dell was the largest supplier in the fourth quarter of 2018 with $552.4 million in revenue and a 28.6% share of the market. Nutanix generated $284.9 million in branded revenue, which represents 14.8% of the total HCI market during the quarter and 49% of the total HCI revenue generated through sales of systems running Nutanix software.
From the software ownership view of the market, systems running VMware hyperconverged software represented $734.9 million in total fourth quarter vendor revenue or 38.1% of the total market. Systems running Nutanix hyperconverged software represented $576.2 million in fourth quarter vendor revenue or 29.8% of the total market. Both amounts represent sales of all HCI software and hardware regardless of how it was branded.