Enterprise Hardware Is A 'Game Of Nodes'
In a report published Wednesday, Needham analyst Richard Kugele suggested that "change" is coming to the data center which will be converged and hyper-converged infrastructure (or HCI) solutions managed by software-defined architectures that will help bring it about.
According to Kugele, the overall market for converged and hyper-converged solutions is expected to grow at a 24 percent compounded annual growth rate from 2014 to 2018 which will prove to be a "significantly" faster growth rate than the broader IT market's recent two to three percent growth.
"We believe hyper-converged infrastructure in particular represents one of the most significant architectural changes to the storage and infrastructure world since the introduction of fibre channel as an interconnect for SANs in the 1990s," Kugele wrote.
EMC: Most Aggressive
Kugele argued that no public storage original equipment manufacturer (OEM) has been "more aggressive" in driving and innovating in the HCI world than EMC Corporation (NYSE: EMC) given its reference architecture VSPEX and its dedicated converged infrastructure group VCE (now virtually wholly-owned), its ScaleIO acquisition and its version of VMWare's EVO:RAIL program called VSPEX Blue.
The analyst continued that VCE has been "largely a success" for EMC with an estimated $2 billion in sales that continues to grow, as demonstrated by its 30 percent year over year growth in the recent quarter. In addition, VSPEX Blue may take time to evolve and differentiate beyond some software management and functionality.
NetApp: Unique Player
Kugele stated that NetApp Inc. (NASDAQ: NTAP) has always been "unique" among the large storage IT players. As evidence, its Data ONTAP operating system is considered to be the most prominent data storage operating system in the world. In the converged infrastructure, NetApp has been successful with its FlexPod solution.
Howver, Kugele suggested that NetApp will need to either acquire or find a way to port ONTAP into more of an HCI solution as a complete rewriting of ONTAP may prove problematic.
Hewlett Packard: Taking A Different Approach
Finally, Kugele argued that Hewlett-Packard Company (NYSE: HPQ) is taking a different approach to the hyper-convergence movement.
HP has been vocal early on about converged infrastructure which was self-serving to some degree as their strong position in servers didn't translate into high storage attach rates. If the company were to offer a combined solution, the company would gain customer wallet share.
Compared with other divisions, converged infrastructure continues to perform well, as evidence by the 21 percent year over year growth in the recent quarter.
Yet, hyper-convergence is an "entirely separate beast," differentiated by even more commoditized hardware managed by a software-defined OS.
Kugele also suggested that HP could make an acquisition in the space to "bolster" its capabilities in the critical area.
Latest Ratings for EMC
|Sep 2016||Brean Capital||Terminates||Buy|
|Aug 2016||Deutsche Bank||Maintains||Hold|
|Jul 2016||Bernstein||Downgrades||Outperform||Market Perform|
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