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IDC says that converged systems sales were down in Q4 of 2016

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March 27, 2017

Market research firm IDC asserted today that converged systems sales dropped for 2016's fourth quarter.

IDC added that the overall growth for the year was lukewarm. The analysts' Worldwide Quarterly Converged Systems Tracker for 2016's final quarter revealed that revenues dropped 1.4 percent year over year to $3.09 billion during the fourth quarter of 2016.

That drop in sales came despite such systems accounting for 1.6 exabytes of new storage capacity during the quarter, what IDC calls “a moderate 4 percent compared to the same period in 2015.”

IDC counts four different types of equipment sales in its definition of “converged systems.” The company distinguishes between “integrated infrastructure” and “certified reference systems” but gives both the definition of “pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software.”

“Integrated platforms are defined as offering hardware plus “pre-integrated packaged software and customized system engineering optimized to enable such functions as application development software, databases, testing, and integration tools,” says IDC.

Hyperconverged systems are the likes of Nutanix, VxRail, Cisco's HyperFlex and so on, IDC asserts.

Interestingly, IDC finds Oracle is just about alone in pursuing the integrated platforms market it pioneered with its Exadata appliances. Oracle is now moving to ensure its range of solutions can also do well in hybrid cloud configurations.

It's rather difficult to guess why the overall converged systems market has dropped, because it's collectively more useful than standalone servers that require custom integration. But time will tell.

Eric Sheppard, IDC's research director for enterprise storage and converged systems puts it down to a market in constant evolution.

“Almost on a daily basis, the converged systems market is going through a period of a lot of change," asserted Sheppard.

“We are seeing strong growth from products with new system architectures, increased levels of automation, and the heavy utilization of software-defined (SDN) 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," he added.

But things aren't entirely that bad either. IDC says that for the full 2016 calendar year, global converged systems market revenues hit $11.3 billion, a 5.8 percent growth compared to 2015.

That's still better than the standalone server market's 4.6 percent year on year sales. We'll keep you posted on these and other industry results.

Source: IDC Market Research.


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