Worldwide Converged Systems Revenue Decreased 1.4% 4Q16

Worldwide Converged Systems Revenue Decreased 1.4% 4Q16
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According to the IDC Worldwide Quarterly Converged Systems Tracker, the worldwide converged systems market revenues decreased 1.4% year over year to $3.09 billion during the fourth quarter of 2016 (4Q16). The market consumed 1.6 exabytes of new storage capacity during the quarter, which was up a moderate 4.0% compared to the same period a year ago. For the full year 2016, worldwide converged systems market revenues increased 5.8% to $11.3 billion when compared to 2015.

"The converged systems market is going through a period of change," said Eric Sheppard, research director, Enterprise Storage & Converged Systems. "We are seeing strong growth from products with new architectures, increased levels of automation, and heavy use of software-defined technologies. This growth has been offset by reduced spending on traditional converged systems and a conscious decision by some vendors to terminate some parts of their product portfolio.

IDC's converged systems market view offers four segments: integrated infrastructure, certified reference systems, integrated platforms, and hyperconverged systems. Integrated infrastructure and certified reference systems are pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software. Integrated Platforms are integrated systems that are sold with additional pre-integrated packaged software and customized system engineering optimized to enable such functions as application development software, databases, testing, and integration tools.

Hyperconverged systems collapse core storage and compute functionality into a single, highly virtualized solution. A key characteristic of hyperconverged systems that differentiate these solutions from other integrated systems is their scale-out architecture and their ability to provide all compute and storage functions through the same x86 server-based resources.

During the fourth quarter of 2016, the combined integrated infrastructure and certified reference systems market generated revenues of $1.57 billion, which represented a year-over-year decrease of 15.7% and 50.8% of the total market. Dell Technologies was the largest supplier of this combined market segment with $705.1 million in sales, or 44.9% share of the market segment.

Top 3 Vendors, 4Q16 (Revenues in Millions)

Vendor

4Q16 Revenue

4Q16 Market Share

4Q15 Revenue

4Q15 Market Share

4Q16 /4Q15 Revenue Growth

1. Dell

$705.1

44.9%

$1,043.4

56.0%

-32.4%

2. Cisco/NetApp

$486.7

31.0%

$336.7

18.1%

44.5%

3. HPE

$228.9

14.6%

$324.1

17.4%

-29.4%

All Others

$149.7

9.5%

$158.6

8.5%

-5.6%

Total

$1,570.3

100%

1,862.8

100%

-15.7%

Source: IDC Worldwide Quarterly Converged Systems Tracker

Integrated Platform sales declined 8.6% year over year during the fourth quarter of 2016, generating $823.5 million worth of sales. This amounted to 26.6% of the total market revenue. Oracle was the top-ranked supplier of Integrated Platforms during the quarter, generating revenues of $406.9 million and capturing a 49.4% share of the market segment.

Top 3 Vendors, 4Q16 (Revenues in Millions)

Vendor

4Q16 Revenue

4Q16 Market Share

4Q15 Revenue

4Q15 Market Share

4Q16 /4Q15 Revenue Growth

1. Oracle

$406.9

49.4%

$362.5

40.2%

12.2%

2. IBM

$70.4

8.5%

$116.7

12.9%

-39.7%

2. HPE

$70.1

8.5%

$74.8

8.3%

-6.3%

All Others

$276.1

33.5%

$347.3

38.5%

-20.5%

Total

$823.5

100%

901.3

100%

-8.6%

Source: IDC Worldwide Quarterly Converged Systems Tracker