Hewlett Packard Enterprise (HPE) pulled a hyperconverged infrastructure (HCI) upset and beat out Nutanix for the No. 2 spot in IDC’s quarterly market tracker for branded HCI systems. Dell Technologies, per usual, won the No. 1 spot in the quarterly ranking. However, for the second consecutive quarter both Dell’s and Nutanix’s revenues declined during the third quarter of 2020, while HPE’s grew twenty-five times faster than the overall market with 16.3% year-over-year revenue growth.

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 Q3 with $676.8 million in revenue and a 33.2% market share. However, its revenue declined 4.7% compared to the same quarter in 2019.

HPE finished second with $262.7 million in revenue for the quarter and a 12.9% share of the market.

Meanwhile, Nutanix dropped to No. 3 with $234.3 million in revenue and a 11.5% of the market. This represented a 10.8% revenue drop for the vendor. And while this may be expected as Nutanix exits the hardware market and transitions to a software-only business, Nutanix also saw its HCI software revenue fall during the third quarter.

When it ranked the vendors in terms of the HCI systems’ software brand, once again VMware came out on top. New systems running VMware’s HCI stack delivered $821.1 million in revenue during Q3 or 40.2% of the total market. VMware HCI software revenue grew 4.9% year over year.

Systems running Nutanix hyperconverged software scored $512.6 million in vendor revenue during the quarter or 25.1% of the total market — a 6.7% revenue decline compared to Q3 2019.

Cisco HCI software ranked third, with $121.1 million in vendor revenue and 5.9% market share. While it comes in far behind the two top HCI software vendors, systems running Cisco’s HCI software saw 11.1% revenue growth year over year.

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, and Cisco grew their revenue during the quarter, the overall HCI and larger converged systems market remained relatively flat in Q3. The worldwide converged systems market revenue grew 0.3% year over year to $3.9 billion, while the revenue from hyperconverged systems grew 0.6% year over year during the quarter to $2.0 billion. This represented 52.1% of the total converged systems market.

In a blog post touting its HCI revenue growth, Tom Black SVP and GM for HPE Storage, credited his company’s “strategy that’s squarely focused on providing our customers what they need.”

“It’s important to recognize that there’s no one size fits all — no magical, HCI unicorn that can optimally address the needs of every workload and every business,” Black wrote. “And that simply comes down to different solutions are optimized for different requirements.”

To this end, HPE sells hyperconverged systems that run its own SimpliVity software tightly coupled with InfoSight, its artificial intelligence (AI) management tool, as well as HCI hardware running Nutanix and VMware software.

It’s worth nothing that Dell also gives its customers a choice when it comes to HCI software running on its servers. And while its systems, co-designed and integrated with VMware, tend to get top billing — which makes sense because Dell owns about 81% of VMware — Dell also sells systems with Nutanix and Microsoft HCI software.

IDC’s latest ranking comes as Rancher Labs jumps into the HCI space with a new project called Harvester, open source software built using Kubernetes.