Global Hyper-Converged Infrastructure Market (by Component, Application, End-User, & Region): Insights and Forecast with Potential Impact of COVID-19 (2022-2027)

Hyper-converged infrastructure (HCI) is an information technology that is a combination of various elements such as storage, computing, and networking that are virtualized to provide a single system for users while reducing data centre complexities and increasing scalability. Virtualized computing (hypervisor), software-defined storage, and virtualized networking comprise HCI.

Businesses are leaving traditional storage, server, and networking solutions in favour of hyper-converged infrastructure (HCI) due to the need for enhanced simplicity, agility, and hybrid deployments, which is redefining the current data centre and technological upgrades. The global hyper converged infrastructure market is expected to rise to US$14.60 billion in 2023, progressing at a CAGR of 27.50%, during the forecast period.

Segment Covered

• By Component: In terms of component, the report identifies two segments of the global hyper converged infrastructure market: Hardware and Software. Hardware segmnet held the maximum share in the market as organizations are increasingly turning to hyper-converged infrastructure to simplify complexity for both hardware and virtualized environments. On the other hand, the software segment is expected to grow at the highest CAGR in the forthcoming years.
• By Application: The report provides the categorization of the market into six segments on the basis of application: Data Center Consolidation, Backup Recovery or Disaster Recovery, Critical Applications Virtualization, Virtualization Desktop Infrastructure, Remote Office or Branch Office, and Others. The data center consolidation segment held the largest share in the market, Whereas, the backup recovery or disaster recovery is expected to grow at a significant rate owing to the rising number of data breaching cases.
• By End-User: The report further splits the global market into eight segments based on the end-user: BFSI, IT and Telecom, Manufacturing, Healthcare, Government, Energy & Utilities, Education, and Others. The BFSI held the highest share in the market. Hyper-converged systems tick all critical boxes in the banking, financial services, and insurance (BFSI) industry, such as reducing time in managing infrastructure, as well as ensuring scalability of infrastructure, availability of critical workloads, and disaster recovery (DR). In addition, these systems solve the issue of single-vendor networking infrastructure. Thus, the adoption of HCI in BFSI is expected to grow in the coming years.

Geographic Coverage

According to this report, the global hyper-converged infrastructure market is divided into five regions namely North America, Asia Pacific, Europe, Latin America, and Middle East & Africa. The countries covered in North America region are the US, Mexico and Canada, while Europe includes the UK, Germany, Italy, France, Spain and the Rest of Europe. Moreover, China, Japan, India, Australia and Rest of Asia Pacific are included in the Asia Pacific region. North America held the largest share in the market as the growing number of connected devices and video services are expected to broaden the reach of the hyper-converged industry in North America. Asia Pacific is expected to grow at the highest CAGR in the forthcoming years. The rise in ICT infrastructure investments by government bodies and private companies has enhanced the need to modernize data center structures. Moreover, this is mainly owing to the increase in service requirements among the ever-increasing population base in various Asia Pacific countries. In Europe, Germany occupied the major share in the market.

Top Impacting Factors

Growth Drivers

• Shifting Workload Towards Cloud
• Optimistic Organization Behavior For HCI Installation
• Demand from Healthcare Industry
• Data Center Consolidation

Challenges

• Limitations due to Dual-Socket Servers
• Challenges of HCI Implementation

Trends

• Shift to Subscription-Based Contracts
• Benefits from HCI Adoption
• Transition Towards Multi Cloud Environment
• Moving Towards Edge Computing

Driver: Shifting Workload Towards Cloud

There are various of solutions which can be outsourced and are available for the organizations, so that the organization can utilize that infrastructure for holding their own items. Thus, organizations are preferring on working on these cloud solutions over construction of their personal data center. Cloud companies such as Microsoft (Azure), Amazon (AWS) etc. are providing internet-accessible infrastructures to many companies and organizations. These cloud storage is available in different formats like fully-outsourced cloud infrastructure, hybrid infrastructure (on-premises/private cloud + public cloud), and fully-private cloud infrastructure (owned or managed by a third-party). Thus HCI observed and is expected to continue to boost during the forecasted period.

Challenge: Limitations due to Dual-Socket Servers

Usually every physical application HCI vendors customs dual-socket servers for their HCI nodes, and most use four to 12 CPU cores for their storage software. The result is around 20 CPU cores per node for running desktop VMs, which is plenty if IT can run seven to 12 virtual CPUs (vCPUs) per core. Now, the major challenge arises when the hyper-converged infrastructure for an organizations VDI apply heavy CPU applications, especially when each desktop VM requires two or more vCPU for smooth functioning. Generally, on an HCI platform, IT department may not be able to run 20 VDI units desktops per host, where a quad-socket host connected to a storage area network (SAN) might triple the number of desktops per physical server. In a crux, dual-socket server is not very efficient when the workload is very high in an organization, and HCI is incapable of proper support during such situations.

Trend: Shift to Subscription-Based Contracts

Considering the changing behavior of the clients regarding every aspect of the market, many big brands in HCI market such as Nutanix are coming up with new customer friendly changes in their processing's. For instance, Nutanix came up with shifts in its pricing and licensing structure to make buying decisions even easier, namely the move to subscription or term-based contracts and (concurrently), the shift to a capacity-based pricing methodology. The step was taken somewhere in mid 2017, and the new channel gained popularity in no time. Such new trends are very thoughtful and supportive to many clients as they will be able to acquire the services as per the requisites.

The COVID-19 Analysis

During the pandemic, the use of hyper-converged infrastructure increased since activities in the IT business were often carried out through a 'work from home' framework. As a result, hyper-converged infrastructure was in high demand in the IT industry all over the world. Furthermore, due to the pandemic, the new hyper-converged infrastructure installation has been postponed. On the contrary, the advent of hyper-converged infrastructure as a viable alternative to public cloud computing would have a beneficial impact on the market and considerably contribute to its growth in the forthcoming years.

Analysis of Key Players

The global hyper-converged infrastructure market is considerably dominated. The key players of global hyper-converged infrastructure market are Microsoft Corporation, IBM Corporation, Fujitsu Ltd., Dell Technologies Inc., Cisco Systems, Inc., Huawei Investment & Holding Co. Ltd., Hewlett Packard Enterprise Company, Nutanix, VMware, Inc., Scale Computing, DataCore Software, StorMagic, NetApp, Inc. and Quantum Corporation (Pivot3 Inc.)