Dell To Become ‘Six-Times’ Bigger Than Nutanix, Says Michael Dell

‘So we’re No. 1 and we’re more than twice the size of No. 2 [Nutanix]. We have our sights set on being three-times, four-times, five-times, six-times bigger than No. 2,’ says Dell Technologies CEO Michael Dell in an interview with CRN regarding hyperconverged infrastructure market share.

Michael Dell expects Dell Technologies to widen its hyperconverged infrastructure leadership position significantly in the future, with the goal to become upwards of six-times larger than nearest competitor Nutanix.

“We have a super strong position [in hyperconverged infrastructure] and it’s only getting stronger,” said Dell in an interview with CRN. “So we’re No. 1 and we’re more than twice the size of No. 2 [Nutanix]. We have our sights set on being three-times, four-times, five-times, six-times bigger than No. 2.”

This week, research firm IDC released worldwide hyperconverged infrastructure (HCI) market share data, showing that Dell Technologies gained significant share over Nutanix in the third quarter of 2019. Dell Technologies captured 35.1 percent of the global HCI systems market share, up from 29.3 percent share year over year. The Round Rock, Texas-based company generated $708 million in hyperconverged system sales, up 43 percent year over year.

“IDC measures the calendar quarter; our financial quarter is one month different than that. Our VxRail orders in the third quarter were up 82 percent year over year, even stronger than the IDC numbers reflect,” said Dell.

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Nutanix placed in second for worldwide HCI systems market share in the third quarter, capturing 13 percent share, down from 16.6 percent share year over year, according to IDC. Nutanix HCI system sales reached $262 million, down 7 percent compared to the same quarter one year ago. Nutanix has made a strategic decision over the past two years to remove HCI hardware sales from the company in order to fully transition into a software and subscription company.

When contacted by CRN, Nutanix pointed at a recent blog post explaining how the company is working with both IDC and research firm Gartner to create a more accurate view of hyperconverged infrastructure market share, particularly around software, as Nutanix no longer sells HCI hardware. Nutanix says hardware sales still “significantly” impacts IDC’s market share calculations including HCI software share numbers.

Joshua Lee, director of sales at VirtuIT Systems, a Nanuet, N.Y.-based Dell and VMware partner, said VxRail sales have exploded this year.

“Half of our revenue is pretty much VxRail. It’s just taken off like a rocket ship for our customers,” said Lee. “We’re seeing customers that we sold VxRail to in 2017 and 2018 who are coming back around and starting to expand the initial footprint or add additional clusters for disaster recovery. So it’s continuing to grow the way it was advertised to grow. More importantly, our customers are seeing the value of being able to do simplified lifecycle management with simplified updates through the integration with VxRail Manager and vCenter. It’s been fantastic for our business. I don’t see any reason while it would slow down in 2020.”

Michael Dell said one of the main reasons VxRail is growing rapidly is because customers are realizing the hyperconverged infrastructure’s top-notch automation.

“Customers are increasingly figuring out that when you have that level of automation like we built into VxRail, it costs less than the public cloud -- especially from a predictable workload standpoint,” said Dell. “So there’s tons of growth there and we have VxRail for the edge, which is starting to be a big win particularly in multi-location businesses like retail, banking, insurance, etc. I don’t see us slowing down and certainly the storage innovation continues from our team.”

Looking at IDC’s third quarter market share data, VMware captured 38 percent share of worldwide HCI software, up from 34.8 percent share year over year. VMware generated $766 million in HCI software sales in the third quarter, up 29.5 percent compared to the same quarter one year ago.

Nutanix came in second place in terms of HCI software at 27.2 percent share, down from 33.7 percent share year over year, according to IDC. Nutanix HCI software sales reached approximately $550 million, representing a decline of 4 percent year over year.

Both Dell EMC and VMware, who are both part of Dell Technologies, were named leaders in Gartner’s 2019 Magic Quadrant for Hyperconverged Infrastructure. San Jose, Calif.-based Nutanix was also named a leader, ranking No. 1 for execution and No. 2 for vision on the magic quadrant. VMware ranked No. 1 in vision and No. 2 in execution, while Dell EMC won third place in both vision and execution on the magic quadrant.