The hyperconverged infrastructure [HCI] space was red hot in 2018. IDC had the total market growing at close to an 80 per cent clip with Dell EMC approaching three digits. Indeed, even the laggard vendors in the space could point with pride to high growth rates. This all raises the question of how long this kind of growth can be sustained before levelling off to more mature growth rates, However, Chad Dunn, VP of HCI Product Management at Dell EMC, thinks that the good times are likely to continue for a while longer, and that the longer-term future remains very bright.
Now it would be big news indeed if Dunn was bearish on the outlook for HCI, given his particular role, but he laid out his case to ChannelBuzz why it should still be a robust performer this year.
“We see four big trends that have HCI in their orbit,” he said. “First is the continuing transformation of what the data centre looks like – more agile and pay-as -you-grow. Most companies don’t even look at a two-tier architecture any more. There are a lot of reasons for that. Data growth isn’t slowing down, and the agile data centre is a more economical platform to transform from a cost centre into a differentiator. Last quarter, we got an order for $36 million dollars and $40,000 for the same product. That’s because these products now also let you do light and cheaper.”
The second trend, Dunn said, is that the hybrid cloud has won. The position that AWS used to articulate that HCI can be skipped entirely because it’s simply a way-station to the cloud has gone the way of the dodo.
“We are seeing a trend of some cloud workloads being repatriated for cost or performance reasons,” he said. “Everyone now agrees that it will be a hybrid cloud world. The line between on-prem and the public cloud will be blurry, with workloads moving back and forth depending on what will be most effective in a given situation. But the position that HCI will give way to the cloud has been disproven by the fact that Amazon itself is now offering things on-premise. Even the public cloud providers realize that there are reasons some workloads will stay on premise. Now AWS is at VMWorld! It’s a partnership we value and invest in.”
The third trend is that the growth of Edge Computing has a natural bias to HCI.
“Edge computing is intended to be able to start very small and scale, which is the same proposition as HCI,” Dunn said. “The goal of many organizations is now to use hyperconverged to put more compute power out at the edge.
“The fourth factor, which is a big up and comer for us from last year, is cloud native and container adoption on HCI,” Dunn noted. “Pivotal is a strategically aligned business for us, and used to be one per cent cloud native. Last year, it was up a lot from Kubernetes as containers-as-a-service layer. It’s now more seen as infrastructure than as a workload. We are starting to see our core sales force carry that message of containers as a service, and we see it being a significantly larger percentage of the business in the coming year.”
A key factor in Dunn’s confidence in continued market strength is that these trends are at different stages of development, and others are likely to follow. That’s why, while IDC expects the HCI growth rate to decline to about 30 per cent, Dunn said they tend to be conservative, and he thinks HCI will do rather better than that this year.
“HCI has been propelled by several waves of innovation, and as the growth rate of one levels off, we have seen other trends ascend,” he said. “Cloud-native containers may well catch the curve. Customers are not going back to a three-tier architecture. Software-defined storage will also evolve to provide another kicker to the growth rate. So will storage class memory. There are some very interesting things we can do there to increase memory pools.”
Dunn also commented on the persistent vendor stability in the space, even given the accelerated growth. Hot markets tend to attract new entrants, but Dell EMC, Nutanix, Cisco and HPE remain the dominant players
“All of these companies, including ourselves, have broad horizontal applicability, so we can expand into other use cases and the arithmetic just works in our favour, so that we benefit from that high CAGR,” he said. “NetApp has come into the market, but our HCI is based on high volume PowerEdge servers. They have a blade combined with all-flash. There are smaller niche players, but its hard to break out of that niche. They sell two-node offerings, but we just launched a two-node offering on VxRail in December, and can also do inexpensive deployments in those use cases. In addition, a lot of customers are still willing to go with three-node for these kinds of deployments, because they don’t get hung up on capital costs. They think about operational costs. That where we are very strong – management and operational experience. You can use vCenter to manage these deployments – but I don’t recommend it for thousands of sites. On the other hand, we have very robust capabilities for that. A big part of our R&D investment this year is API experience around deployment at scale.”