RackTop Systems has racked up its first round of outside capital, six years after launching its “cyber-converged” BrickStor NAS appliances. The Fulton, Md.-based vendor received $15 million in a Series A round to fund a storage product that focuses on security for large capacities of data.
“We started shipping product in 2012 and have grown our customer base organically. This is our first institutional round, but we’re on the third generation of our product. We look at this as more of a growth round” for product enhancements, Bednash said.
Bednash said the vendor plans to use the funding to address enterprise multi-cloud environments, particularly in response to increasingly virulent viruses and ransomware.
BrickStor is unified hybrid storage that stratifies data on DRAM, disk and flash. The DRAM layer services most I/O requests. Data can be moved transparently to S3-compatible clouds using the RackTop MyRack Manager operating software. Built-in security features include behavioral audits, multiple encryption keys and “always on” alerts for exfiltration and ransomware.
Although it lacks the exposure and marketing muscle of larger NAS players, RackTop Systems claims BrickStor has experienced some success as a drop-in replacement for older NetApp and EMC Isilon NAS arrays.
The new funding will help expand engineering and sales teams, Bednash said. He said storage hardware will remain the flagship, but RackTop Systems plans to add software, including a virtual NAS for cloud-only customers and hyper-converged environments needing scalable file storage. Those software-based options are in development and not expected to be available for at least two years, he said.
Razor’s Edge Ventures and Grotech Ventures led the funding round, with participation from Blu Venture Investors, Gula Tech Adventures and Maryland Venture Fund.
Converged secondary data vendor Rubrik is the latest storage vendor to jump on the cloud-like pricing bandwagon.
Rubrik today said it is adding a subscription pricing model, called Rubrik Go. Go is a three-year subscription that covers software, support and hardware – including refreshes – for data managed on-premises and in public clouds. Customers will pay on a per appliance basis, but licenses can be moved across hardware and clouds. All software and hardware upgrades are included in the three-year subscription.
Rubrik will offer new customers a choice between Go evergreen pricing and traditional perpetual licensing. There will be two versions of Go. Rubrik Go Foundation for cloud backup, recovery and cloud archiving is available now. It includes Rubrik Cloud Data Management software for backup, replication, analytics, copy data management and search as well as CloudOut cloud archiving and Polaris SaaS management.
A Rubrik Go Premium edition will follow later this year with more applications and a higher subscription price.
Rubrik sells its data protection and management software on branded appliances, and channel partners bundle the software on third-party hardware. Rubrik has qualified its software to run on Dell EMC, Hewlett-Packard Enterprise and Cisco servers, and it runs in AWS and Microsoft Azure clouds.
Jenn Wei, product marketing director for Rubrik, said the vendor came up with Go pricing after surveying customers. “The majority were looking for something different,” she said. “They’re frustrated with licensing. Tech refreshes become expensive. They want automatic access to technology and free upgrades.”
Wei said customers who choose Go pricing will likely pay the same initial price as those who pick perpetual licensing, but refreshes will cost less with subscription licensing.
Rob Owen, chief architect at Rubrik channel partner Computer Design & Integration (CDI), said he welcomes Go evergreen pricing.
“Rubrik is embracing where the industry is going,” Owen said. “Historically with IT infrastructure, most of the complaints are that every three to five years manufacturers come knocking on your door looking for the next deal. And most companies would not give you credit for the software that runs on the hardware. You have to re-buy the software stack on that infrastructure.”
IT companies have been changing their pricing model to mimic the way public cloud services offer storage and compute. Server vendor Lenovo and software-defined storage startup Datrium unveiled pricing new models in recent weeks, but Rubrik Go is most similar to the Pure Storage Evergreen program the flash array vendor adopted in 2017. Pure’s Evergreen Storage includes software and hardware refreshes in its licensing, forging a storage-as-a-service process that makes it an opex rather than capex model.
CDI also sells Pure Storage, and Owen said Pure Evergreen has been popular with his customers.
“Pure leverages commodity hardware the same as Rubrik does,” he said. “The bundled software is the real value. You pay an annuitized fee versus a one-time thing where you only own the software on the hardware you just bought.”
Owen said subscription evergreen pricing would be a better option for almost all IT consumers, with few exceptions where capex makes more sense. “There’s an odd financial model where it won’t make sense, depending on how long you’re going to own a set of equipment,” he said. “If you’re willing to push depreciation of equipment for a long time – typically more than five years – it makes sense to buy maintenance up front with perpetual licensing.”
Vexata is thinking outside the box.
The NVMe all-flash array vendor is sampling VX-Cloud Data Acceleration Platform reference architecture with major server vendors. The hardware design combines the Vexata VX-OS storage operating system on standard hardware platforms. General availability is expected later this year.
The Vexata flagship storage product is the VX-100 Scalable NVMe Flash Array VX-OS orchestration creates a separation layer between the control plane and data plane to allow parallel access between SSDs.
For VX-Cloud, Vexata modified the VX-OS software to run on Xilinx field-programmable gate arrays (FPGAs) embedded on controllers. The product is designed to appeal to enterprises, hyper-scale data centers and managed cloud providers.
The FPGA hardware accelerates clones, encryption, and other data services. Vexata claims VX-Cloud server-side flash performance equivalent to its branded arrays.
“Right now, our software runs only inside our VX-100 hardware clients. We made some enhancements to allow it to run on FPGAs inside standard servers to accelerate IO. We can give very good performance using standard servers,” ” said Rick Walsworth, Vexata’s vice president of product and solutions marketing.
VX-Cloud systems are in direct availability with server partners. Early design wins include Fujitsu Primergy and Supermicro BigTwin servers. Fujitsu and Vexata in January forged a partnership to sell targeted NVMe AI storage for Oracle, SAP and VMware. Walsworth said
The NVMe transport allows devices to access flash storage across a PCIe bus. Industry observers expect NVMe storage to gradually replace the older SCSI protocol for message commands between a host and storage.
Vexata is jockeying with fellow NVMe hardware startups Apeiron Data Systems, E8 Storage and Pavilion Data. Those vendors sell storage systems that exclusively used NVMe U.2 SSDs, all based on white-box servers. Another startup, Excelero, provides a software-defined NVMe mesh that virtualizes NVMe block devices as a pooled resource.
Major vendors Dell EMC, Hewlett Packard Enterprise Nimble Storage, IBM, NetApp and Pure Storage are shipping all-flash arrays that support both NVMe media and traditional SAS and SATA SSDs.
Walsworth said VX-Cloud systems allow a data center to scale block and file storage across multiple racks. Licensing will be based on consumed storage under management. “We are trying to move more towards an open systems model where customers can provide their own hardware to run our software on top of it.”
Axcient’s new CEO started this week at a company that has the same name as it did at its beginning but looks quite different after a recent merger.
David Bennett, formerly the chief revenue officer at cybersecurity firm Webroot, began his job as Axcient CEO on Monday.
In 2017, Axcient merged with eFolder, bringing together Axcient’s cloud-based disaster recovery and data protection platform and eFolder’s cloud business continuity, cloud file sync and cloud-to-cloud backup. After existing as Axcient-eFolder for a while, the company is now called Axcient.
Axcient’s Business Availability Suite includes backup, business continuity, recovery and cloud migration. The vendor sells its products through managed service providers (MSPs).
Over a 10-year period, Bennett had a number of leadership roles at Webroot, which was acquired by data protection vendor Carbonite in February. He also held leadership positions at Lenovo and Sony.
“It’s a natural progression,” Bennett said of going from Webroot to Axcient CEO.
Axcient has made security a focus, which is important as Bennett noted that hackers often target service providers that serve multiple businesses versus attacking just one SMB.
“It’s not a matter of if, it’s when,” the Axcient CEO said of the possibility of being hit with a cyberattack.
Other trends in Axcient’s market include customers transitioning from on-premises Microsoft applications to the cloud-based Office 365, as well as striving for compliance in an increasingly complicated regulatory environment, said CMO Angus Robertson.
‘Not the old Axcient’
Though they existed in the same general market, Axcient and eFolder had different technologies, platforms and customer bases. The eFolder line of products, including backup and disaster recovery platform Replibit, was geared toward SMBs. Axcient was a pioneer of disaster recovery as a service and had a more midmarket reach, but also hit SMBs and the enterprise.
Robertson said the company is focused on combining the best of both and what it’s calling “business availability,” all backed by the Axcient Cloud.
“We’re not the old Axcient,” said President Eric White. “It is a new company.”
The internal transitioning started in late 2017, White said. That process included a re-commitment to the channel. Axcient now claims about 3,000 MSPs.
Bennett replaced Matt Nachtrab, who left the CEO post in 2018. In November, the company rebranded from Axcient-eFolder to Axcient. The company is based in Denver, where eFolder had its headquarters. Axcient was previously based in California.
“We are a profitable organization now because of the work we did in 2018,” White said.
Future rollouts include the launch of a “business availability” portal as one place to access all Axcient products, as well as enhanced features in Axcient’s cloud, including multi-tenancy and faster recovery time.
Veeam Software narrowly missed its goal to become a $1 billion revenue company in 2018, falling $37 million shy and probably six months short.
Veeam founder and executive vice president Ratmir Timashev said Veeam finished 2018 with $963 million in bookings revenue after 16% growth over 2017. Timashev said he expects to break $1 billion for the trailing 12 months by the end of the second quarter of 2019.
Timashev said it was a “slight disappointment” to miss the billion-dollar Veeam revenue goal for the year. He said Veeam revenue came up a bit short because it “under invested” in its traditional SMB and commercial markets to concentrate on moving into the enterprise. But he predicted the enterprise strategy — including reseller deals with Hewlett Packard Enterprise, Cisco, NetApp and Lenovo — will lead to greater growth in the long run.
The Veeam revenue growth also slowed last year, after 36% growth during 2017. Fresh off a $500 million investment from Insight Venture Partners in January, Timashev said privately held Veeam will pursue acquisitions and chase more multi-cloud customers to grow in 2019.
“For us, 2019 is the most important year in the history of the company,” Timashev said. That’s because of a shift in the industry to multi-cloud and hybrid cloud use, and the battle to win that market. Timashev said the latest update to Veeam Availability Suite 9.5 plays into that strategy. Update 4 focused on facilitating tiering and migrating data into public clouds.
New executive team, new dreams ahead
Veeam has a slightly new look to its executive team in early 2019 than it had at the start of 2018, although the new bosses are really the same as the old bosses. The departure of co-CEO Peter McKay in October left Timashev’s founder partner Andrei Baronov as the lone CEO. Baronov runs product strategy, research and development. Timashev handles sales and marketing in place of McKay, and executive vice president of operations William Largent remains in charge of legal and finance.
Largent joined Veeam in 2008 – two years after Timashev and Baronov started the company – and the trio worked together at Aelita Software before that. All three have held the Veeam CEO job during the company’s lifetime.
Veeam has been profitable since 2009, Timashev said. He said the vendor had $800 million in cash and investments before the recent half-billion dollar investment from Insight Venture Partners. But it has not invested much in acquisitions over the years. In late 2017, Veeam bought AWS data protection company N2WS in its first acquisition in 10 years and it has not bought another company since then.
That is expected to change in 2019. Timashev would not disclose potential acquisition targets but said Veeam has some gaps in cloud data management. Other potential technologies Veeam could acquire include analytics, machine learning/artificial intelligence, data compliance and data governance.
Container protection is another area Veeam is exploring in 2019, following inquiries from customers.
Veeam is also expanding internally. The vendor plans to add 500 software developers to its research and development office in Prague. Veeam has about 3,500 employees worldwide with plans to add an additional 1,000 this year.
Timashev said Veeam’s Backup for Microsoft Office 365 is its “fastest growing product of all time.” About 55,000 organizations have downloaded the Office 365 backup, representing more than 7 million user mailboxes, according to Veeam.
Timashev said he expects $175 million in Veeam revenue from its enterprise hardware customers in 2019. He said Veeam will continue to partner with hardware vendors rather than follow rivals Commvault, Veritas and Dell EMC into selling branded appliances.
IBM storage hit another blue period last quarter. After pulling out of a revenue slump to start 2018, IBM last week closed an uneven year with declining sales of storage hardware, mirroring flat overall earnings for the quarter and fiscal year.
A bright spot: IBM cited a spike in demand for its hybrid cloud platforms, fueled by increasing adoption of big data and interest in AI.
IBM breaks revenue into four broad product sets: cognitive solutions, global business services, cloud technologies and hardware systems. IBM lumps storage in its systems segment, which generated $8 billion, up 2% year over year.
CFO James Kavanaugh blamed the slide mostly on lower demand for midrange IBM storage products, which include IBM Storwize, and DS8880 mainframe arrays.
“The storage market remains very competitive, with ongoing pricing pressures,” Kavanaugh said.
Demand for all-flash IBM storage is strong, Kavanaugh said, although he provided no figures. He said IBM will extend NVMe across its storage portfolio this year.
IBM’s latest focus is helping customers build IBM storage clouds for AI and edge projects. New Z Series mainframe systems and high-performance Power9 processors have been rolled out to enterprises that require advanced analytics or cloud computing.
IBM cloud revenues increased 12% last year to more than $19.2 billion. Software-as-a-service revenue closed the year with an annual run rate of $12 billion, up 21%.
Without disclosing details, Kavanaugh said the number of new clients using IBM Cloud Private “accelerated” last quarter, and he cited growing adoption for the IBM Private Cloud for Data platform.
The proposed IBM-Red Hat acquisition is on track to close this year . Kavanaugh said the combined company will “hit the ground running. We see an opportunity to lift all of IBM by selling more of our own IBM Cloud, our analytics and AI capabilities on OpenShift across multiple platforms.”
Zerto is set to launch the latest incarnation of its flagship product that converges backup and recovery, and will enable users to recover to a point in time going back years.
Zerto 7, the new edition of the Zerto IT Resilience Platform, is scheduled for a tech preview in February and general availability in April.
“Legacy backup doesn’t really work anymore,” said Rob Strechay, senior vice president of product, on a webinar preview of Zerto 7 last week. Strechay pointed to the complexity and cost of old backup products and emerging threats such as ransomware as reasons why a new data protection platform is needed.
The major new feature in the Zerto IT Resilience Platform is the Elastic Journal, which combines short-term journaling technology with long-term repositories. Through its journaling, Zerto previously offered the ability for an organization to roll back to a point in time within the last 30 days and recover. Now the Boston-based software vendor claims it will enable point-in-time recovery going back years.
“It lets you simply rewind to any point in time with no data loss or downtime,” said Strechay, who previewed Zerto 7 at the vendor’s annual ZertoCON user conference last May.
The Elastic Journal offers point-in-time recovery across files, virtual machines, applications or sites. Strechay said he remembers a time when he had to use many tapes just to bring back one application.
Zerto claims recovery point objectives of seconds and recovery time objectives of minutes.
“It gives you a much more flexible way of handling long-term retention,” Gijsbert Janssen van Doorn, technology evangelist at Zerto, said in an interview.
The Zerto IT Resilience Platform uses Changed Block Tracking copies to keep costs down, van Doorn said. The product features new support for secondary storage target repositories such as ExaGrid and HPE StoreOnce appliances.
Zerto is hardware-agnostic and has no plans to start making appliances, Strechay said.
The ability to restore to a given point in time is a critical functionality in the evolution of recovering from ransomware and threats of that nature, said Phil Goodwin, research director at IDC.
“The Elastic Journal is fairly unique,” Goodwin said.
Application mobility and what’s next
Goodwin said another key piece of Zerto IT resilience technology is its application mobility. Zerto is one of the companies ahead of the game in its ability to move workloads from one location to another, for example between public clouds. He pointed to VMware, Microsoft and Veeam as other vendors that provide that capability.
The market is moving from an era of products offering separate functionalities to vendors providing a “continuum” of application availability, workload migration and management of data in different locations, Goodwin said.
“I think they’re in a very unique spot. They have very good technology,” for example in replication, journaling and workload migration, Goodwin said. “The question is now can they get the mass adoption they need to compete against larger companies?”
Goodwin said Zerto’s next big move could be more integration with other vendors and systems. Veeam, one of Zerto’s top competitors and another vendor with no plans to manufacture its own hardware, has launched several appliance partnerships in the last couple of years with vendors such as Cisco and Lenovo.
“Building out their ecosystem is going to be critical for Zerto to succeed,” Goodwin said.
Zerto is discussing physical protection and container support as potential future elements of its IT resilience platform, van Doorn said.
The new Zerto IT Resilience Platform also features intelligent index and search capabilities, an enhanced user interface and analytics. The longer organizations keep data, the more important it becomes to be able to search and analyze that data well.
All current customers will automatically receive the new features at no additional cost, according to Zerto. For new customers, Zerto will continue to price per virtual machine.
Zerto claims more than 7,000 customers.
One day after Rubrik pulled in more than a quarter of a billion dollars in fresh funding, rival Veeam Software picked up nearly twice as much.
Veeam today said Insight Venture Partners has invested an additional $500 million in the data protection software vendor. That brings the total investment in data protection and data management technologies to $761 million this week. Throw in the $250 million funding that Cohesity received in June 2018 and $100 million for Actifio last August, and you have four nine-figure funding rounds worth more than $1 billion in the space in eight months.
Like Rubrik, Veeam is looking to use its haul in part on acquisitions to bring it new technologies. Ratmir Timashev, a Veeam founder and its executive vice president, identified cloud management, containers, and greater support for KVM hypervisors as areas that Veeam will seek to bolster.
“Our goal is to grow beyond backup to intelligent data management,” he said.
In 2018 Veeam acquired N2WS, a small vendor that provides backup for data on Amazon Web Services. Timashev hinted that bigger deals are coming.
“As we enter our second decade, we might need larger cash reserves for much larger acquisitions,” Timashev said.
Insight Venture Partners invests in other data protection vendors, and owns another Veeam rival, Unitrends. Timashev did not identify companies Veeam is considering buying, but he did say Unitrends is not one of them.
There are significant differences between the two data protection vendors who received funding this week. On the technology side, Veeam remains a software-only product while Rubrik sells software integrated with hardware appliances. Timashev said Veeam, which originally specialized in protection of virtual machines but has expanded into physical and cloud protection, will not follow backup software vendors such as Veritas and Commvault down the path of integrated appliances.
He said Veeam will continue to support a wide range of primary and secondary storage vendors instead of competing against them.
“We understand the hardware model, but Veeam is software-defined,” Timashev said.
On the business side, Rubrik is a traditional technology startup relying heavily on venture funding and aiming to eventually become a public company. Swiss-based Veeam was self-funded for years, until Insight Ventures came aboard as a minority investor in 2013. Timashev said the venture capitalist and private equity firm remains a minority investor, even with the fresh $500 million investment. Veeam has no other venture or private equity funding.
Timashev said Veeam, which launched in 2006, has been profitable for years. He said the vendor fell just short of its goal for $1 billion in bookings in 2018 but he expects to hit that milestone in 2019. He said Veeam’s goal is to go beyond $2 billion within five years. Timashev said Veeam made more than $100 million in profit in 2018, and had close to $800 million in cash before the new investment.
Unlike Rubrik and most startups, Veeam is not looking to get acquired or go public. Timashev and Veeam’s other founder, CEO Andrei Baronov, remain in control of the company.
“We don’t have to go public,” Timashev said. “We have the ability to stay flexible and nimble without additional pressure from public shareholders. We have the flexibility that a public company does not have.”
Timashev said Veeam has more than 3,500 employees and plans to add nearly 1,000 in 2019.
Rubrik, which helped change the role of backup in data management, is shopping for new technologies for its Cloud Data Management platform.
Rubrik today said it completed a whopping $261 million Series E funding round, bringing its total venture funding investment to $553 million. Overall funding is down for storage vendors, but Rubrik and its rival Cohesity have proven the exceptions. In mid-2018, Cohesity completed a $250 million round to bring its total to $410 million.
Rubrik and Cohesity popped up in 2014, attempting to bring the concepts of hyper-converged infrastructure to data protection. Legacy backup vendors have been scrambling since then to add scale-out products that can handle backup, archive, copy data management and data governance features to data stored on-premises and in clouds.
Bipul Sinha, Rubrik’s CEO and one of its founders, said Rubrik will use the funding to add technologies that it can deliver faster through acquisitions than internal development. Rubrik in February, 2018, acquired cloud database backup startup Datos IO in its only acquisition so far.
“We’ll be opportunistic when it comes to acquiring products and technologies to expand our platform,” Sinha said.
He identified artificial intelligence, machine learning and analytics tools that help organizations get more out of their data as areas where Rubrik will expand. Sinha said these technologies can help Rubrik’s Cloud Data Management software deal with regulations such as GDPR.
“In 2019 we’ll enter new markets,” Sinha said. “Backup and recovery is just our starting point. Now that we have the data, we’re looking at applying machine learning, artificial intelligence and other analytics tools that extracts more intelligence out of the data for compliance, governance and security.”
A big question about Rubrik is whether it can appeal enough to large enterprises to win customers from large legacy backup vendors such as Veritas, Dell EMC and IBM. Sinha said Rubrik has enterprise needs covered after adding enhanced data protection for Oracle, SAP HANA and file storage last year.
Startups don’t usually go out on the prowl for companies to buy, but few startups have more than half a billion dollars in funding. Sinha said Rubrik went from 700 customers at the start of 2018 to more than 1,300 by the end of the year, and revenue also roughly doubled. And Rubrik may not be finished yet with VC money. Sinha said it will continue to raise money if it must to fuel growth.
“There is a transition happening in data management that is being expanded into the multi-cloud and hybrid cloud world,” he said. “How do we deliver more core services, capture more share of wallet and make Rubrik an iconic company for the next 30 to 40 years? We’re focusing on the opportunities in front of us.”
He did say Rubrik will become a public company, but there is no timeframe for its initial public offering. Rubrik is far from profitable.
“That is our ambition,” he said. “Going pubic is a milestone on our journey. We want any large business around the world to think of Rubrik for their data and application management challenges.”
Rubrik has made moves over the past year that indicates it is aiming for an IPO soon. In 2018 it hired a new CFO and chief legal officer, and coaxed Avon Puri from VMware to serve as CIO. Microsoft chairman and former Symantec CEO John Thompson and former Cisco CEO John Chambers joined Rubrik as investors last year, with Thompson also taking a board seat and Chambers serving as an adviser.
Rubrik and Cohesity have likened their architecture to hyper-convergence for secondary data, and both companies have executives who were involved early on with hyper-converged pioneer Nutanix. Nutanix became a public company in 2016 after raising $394 million in VC funding. It has continued to grow the company and chase revenue, even while losing hundreds of millions of dollars every year. Rubrik appears to be following that strategy of trying to grow in a rapidly expanding market.
But Sinha said Rubrik will not follow Nutanix down the past of building its own cloud service. Nutanix this year launched its Xi cloud services that will eventually challenge Amazon and other public clouds.
“No, we will not build our own cloud,” Sinha said when asked if Rubrik would go that route. “We have strong partnerships with Microsoft, AWS and others, and we will continue to accelerate those partnerships.”
New investor Bain Capital Ventures led the funding round, with previous venture capitalist investors Lightspeed Ventures, Greylock Partners, Khosla Ventures and Institutional Venture Partners participating.
Major storage and server vendors are angling for position in hyper-converged systems. But as has been the case for a while, the jockeying really is for who finishes in third place.
The battle for first and second is a tilt between Dell EMC subsidiary VMware and hyper-converged infrastructure (HCI) market pioneer Nutanix. Wells Fargo Securities, citing market estimates by analyst firm IDC, said in a research note those two vendors sold 70% of all HCI systems during the September quarter, or $1.5 billion.
The combined clout of Dell EMC and VMware give it control of nearly 60% of the market. Nutanix claimed a 35% share, with other vendors in scrimmage for the leavings.
Industrywide, IDC said overall HCI revenues surged 15% from the prior quarter, up 67% year over year to a record $1.7 billion.
The combination of VMware Virtual SAN (vSAN) software-defined storage and vSAN Ready Nodes led the way at $591 million, which equates to 35% share of the HCI market. The VMware HCI figures include software-only licenses for vSphere ($89 million). VMware reported for the October quarter that VSAN bookings grew 50% year over year.
Customer can get VSAN as a software-only license, or buy it packaged on x86 Ready Node servers from certified hardware partners.
Dell Inc. this month won approval from VMware shareholders to go public by buying up a tracking stock tied to the valuation of the virtualization giant. The financial maneuver is expected to enable Dell to start trading its common shares Dec. 28. and to keep VMware as a separate publicly traded company.
The Nutanix software-defined model, one year later
According to the IDC forecast, Dell EMC saw HCI revenue increase to $373 million, good for 22% market share. Coupled with VMware, that gives Dell Technologies control of nearly 60% of the market.
Dell EMC’s growth is tied to rising arc its VxRail flagship, which fueled a 109% increase in revenue to $184 million. Rack-scale VxRack HCI accounted for $80 million, representing year-over-year growth of 129%.
Dell also gained $124 million from sales of its XC Series, which bundles the Nutanix software stack on 14th generation PowerEdge servers. The Dell OEM deal provide 9% of Nutanix revenues during its recent quarter.
Nutanix created the HCI market by integrating compute, networking, storage and hypervisor software on a single hardware appliance. Nutanix rode the business model to an initial public offering in 2016, but last year ditched hardware to phase in a software-only licensing model, similar to the approach of VMware.
Aside from Dell, Nutanix has server deals with Cisco, Fujitsu, IBM, HPE and Lenovo. During the vendor’s last earnings report, Nutanix executives said subscriptions accounted for 51% of revenue
IDC said customers bought an estimated $585 million worth of Nutanix HCI gear, jumping 65% year over year. Direct sales of Nutanix NX Series accounted for $281 million in revenue. If you remove sales through third parties and OEMs, Nutanix’s share remained flat at around 35%.
Hewlett Packard Enterprise came in a distant third at $112 million, an improvement from $54 million from a year ago. The lion’s share of HPE’s HCI revenue stem from the SimpliVity product it acquired being in the market a full year.
Cisco HyperFlex sales of $78 million give the network and server vendor implied market share of 4.7%, down roughly half a point. Wells Fargo analysts characterized Cisco’s traction in HCI as “underwhelming.”
Netapp and Cisco have partnered on FlexPod CI for years, which uses Cisco servers and networking attached to NetApp FAS storage. NetApp is a latecomer to hyper-convergence. The NetApp HCI has been shipping about a year, based on SolidFire all-flash arrays it acquired in 2015. NetApp HCI revenue went from zero to $21 million last quarter.
Not mentioned are IBM and Hitachi Vantara. IBM uses its VersaStack converged infrastructure reference design to compete in the HCI market. Hitachi in September refreshed its Hitachi Unified Compute HC system, featuring an upgrade to NVMe flash.
The remaining $509 million in market revenue is credited to an assortment of unidentified vendors. The list likely includes niche vendors such as Datrium, Pivot3 and Scale Computing.