Hyper Converged Infrastructure (HCI) Market by Component, End-user and Geography - Forecast and Analysis 2023-2027

Hyper Converged Infrastructure (HCI) Market Size 2023-2027

The Hyper Converged Infrastructure (HCI) Market size is forecast to increase by USD 58.94 billion, at a CAGR of 27.98% between 2022 and 2027. Market expansion hinges on multiple critical factors. One of these is the rising need for robust data protection solutions, driven by the escalating volume of digital information and the growing threats to cybersecurity. Another influential factor is the drive towards reducing Total Cost of Ownership (TCO), which prompts businesses to seek cost-effective and efficient solutions that deliver long-term value. Additionally, the market's growth trajectory is shaped by the demand for simplified management processes, emphasizing user-friendly interfaces and streamlined operations. These factors collectively underscore the evolving landscape of data management and cybersecurity, where businesses prioritize solutions that offer comprehensive protection, cost efficiency, and ease of use to effectively navigate the complexities of modern digital environments.

What will be the size of the Market During the Forecast Period?

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Market Segmentation

This market report extensively covers market segmentation by component (solutions and services), end-user (financial services, healthcare, education, government, and others), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

Market Dynamics and Customer Landscape

The market is driven by factors like hardware requirements, the adoption of SolidState Drives for faster storage, and the integration of Knowledge platforms for enhanced management. Challenges such as Data breaches and ensuring Data security are critical concerns. Trends like Virtual desktops and Software-defined storage are shaping the market, while challenges like infrastructure refresh, economic conditions, and the need for robust Disaster recovery solutions are areas needing attention. HCI's growth is further fueled by the demand for Scale Computing solutions, addressing complexities in Servers and Storage management across Distributed infrastructure and Commodity datacenters.

Key Market Driver

One of the key factors driving the market growth is the increasing demand for data protection. There is increasing adoption of HCI systems across organizations as it enables enterprises to get the benefits of on-demand infrastructure for data-intensive workloads including VDI and databases without the need to put resources in the public cloud. However, there are some regulatory compliance hurdles associated with the storage of data in the cloud.

For instance, there are some strong regulations regarding the storage of organization data locally in countries like Turkey. The main advantage of the HCL system is that it enables enterprises to maintain data safely in their on-premises data centers and to get multiple data protection features such as snapshots, replication, and encryption. Thus, such benefits are positively impacting hyper converged infrastructure (HCI) market growth. Hence, such advantages are expected to drive market growth during the forecast period.

Significant Trends

A key factor shaping the market growth is the separate compute and storage nodes in HCI. The main advantage of HCL systems across organizations is their ease of scalability. It enables customers to add or remove nodes to scale up or down. However, there were some issues associated with the addition of entire server nodes with both compute and storage capacity for HCI systems.

Thus, several market players resolved this issue by introducing separate storage nodes. For instance, Nutanix utilizes separate storage-only nodes if some users need to just scale their storage.  As a result, these systems enable customers to deploy both storage and compute cAPACity as per their business needs. Thus, these benefits are positively impacting the hyper converged infrastructure (HCI) market growth. Hence, such factors are expected to drive market growth during the forecast period.

Major Restrain

HCI appliances' lack of data services is one of the key challenges hindering the market growth. Several storage arrays in the market have in-built data services including deduplication and compression which minimizes the overall amount of data that needs to be stored in the system. Thus, it enables optimization of the storage capacity. However, HCI systems don't have data services including s large-scale deduplication and compression, as well as real-time replication. 

Another challenge associated with HCI appliances systems is the quality of service (QoS), which ensures min/max levels for applications. Thus, such a  lack of data services in HCI appliances is negatively impacting the hyper converged infrastructure (HCI) market. Therefore, it is expected to hinder market growth during the forecast period.

Market Segmentation By Component

The market is witnessing rapid growth and adoption driven by various factors and trends. Organizations are increasingly focusing on streamlining their IT infrastructure while addressing critical aspects such as hardware requirements and storage solutions like Solid-State Drives (SSDs). HCI solutions also play a vital role in facilitating knowledge platforms by providing a robust and scalable environment for data-driven insights.However, with the rise in digital operations, concerns regarding data breaches and data security have become paramount. As a response, organizations are turning to colocation services and leveraging virtual desktops to enhance security and enable remote work.The market also addresses crucial aspects such as capital expenditure and operational expenditure optimization, especially in the context of economic conditions that demand cost-effective infrastructure solutions. Disaster recovery capabilities, including deduplication and compression technologies, are integral parts of HCI, ensuring data integrity and efficient management.

The solutions segment is estimated to witness significant growth during the forecast period. Some of the key solution of the HCI system comprises hardware including monitor and CPU used in HCI. The hardware of the HCI system integrates computing, storage, and networking hardware into a single physical system. It also comprises a software-based control layer that enables hardware resources to be pooled and physical infrastructure to be managed through software.

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The solutions segment was the largest segment and was valued at USD 3.90 billion in 2017. Additionally, the converged system architecture utilizes commodity hardware with software-based control tools. However, the advantage of hardware tools is that it has a  longer shelf life when compared to solutions which negatively impacts sales of solutions in the long run. Hence, the growth of this segment in the global market is slow during the forecast period.

Market Segmentation By End-user

The increasing applications of HCI systems in the financial institution segment will increase the market growth during the forecast period. Several financial institutions highly depend on local IT infrastructure that is maintained by staff from a central location. There is increasing adoption of HCI systems across financial institutions as they are suitable for remote office/branch office deployments. Furthermore, these systems deliver a low-cost data center solution with integrated computation, storage, and networking. The main advantage of HCI systems is their ability to scale up and down as per financial institutions as per their requirements. Hence, such factors are expected to fuel the growth of the segment which, in turn, will drive the market growth during the forecast period.

Regional Overview

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North America is estimated to contribute 47% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. One of the main factors which are significantly contributing to the growth of the global hyper-converged Infrastructure market in North America is that the region is an early adopter of advanced technologies. Additionally, the region offers a favorable environment for data center innovations.

Furthermore, several HCI market players including many prominent players are established in the US. Furthermore, these market players have strong collaborations with value-added resellers (VAR) and system integrators in the region. There is an increasing adoption of HCI systems across various enterprises in the region due to its several benefits such as ensuring reliable on-premises data center solutions, and data protection features including erasure coding, replication, snapshots, and disaster recovery. Hence such factors are expected to drive market growth in the region during the forecast period.

Market Customer Landscape

The market industry report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• AT and T Inc: The company offers hyper-converged infrastructure through its subsidiary NEC Corporation namely NEC HyperConverged Infrastructure, powered by Scale Computing HC3 software, which transforms and simplifies data and storage management.
• Cisco Systems Inc: The company offers hyper converged infrastructure such as Cisco HyperFlex an application centric hyper converged platform to meet the needs of a digitally driven economy.
• DataCore Software Corp: The company offers hyper-converged infrastructure such as DataCore SANsymphony software-defined storage delivers ultimate flexibility, scalability, and cost efficiency in an HCI platform.
  

The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• Dell Technologies Inc.
• Dynamic Network Factory Inc.
• FurUKawa Electric Co. Ltd.
• Hewlett Packard Enterprise Co.
• Hitachi Ltd.
• HiveIO Inc.
• Huawei Technologies Co. Ltd.
• Lenovo Group Ltd.
• Lumen Technologies Inc.
• Maxta Inc.
• Microsoft Corp.
• Nutanix Inc.
• Olabs Technology Co. Ltd.
• Quantum Corp.
• Scale Computing
• StarWind Software Inc.
• VMware Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides a market research and growth analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Component Outlook 
  • Solutions
  • Services
• End-user Outlook 
  • Financial services
  • Healthcare
  • Education
  • Government
  • Others
• Geography Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is propelled by several key factors that shape its growth trajectory. Firstly, organizations are increasingly focusing on optimizing their capital expenditure while streamlining operational expenditure through efficient infrastructure solutions. The demand for advanced technologies like Solid-State Drives (SSDs) reflects the need for high-performance storage in modern IT environments. As companies navigate economic conditions, they prioritize solutions that offer scalability, agility, and cost-effectiveness, Edge infrastructure, driving the adoption of HCI solutions. The shift towards distributed infrastructure and intelligent software is evident, with businesses seeking to modernize their legacy infrastructure and move away from traditional commodity datacenters reliant on spinning disks. HCI solutions leverage technologies like Flash storage and a distributed software layer to enhance performance and efficiency. This is complemented by management tools such as the Management pane and SAN Storage integration, providing a unified approach to infrastructure management.

Moreover, the rise of cloud computing is also shaping the HCI market, with solutions like Microsoft Azure and Google Cloud enabling seamless integration with private clouds and datacenters, facilitating hybrid cloud environments. This integration supports business agility, application availability, and security, crucial aspects in today's digital landscape. Moreover, HCI solutions offer benefits such as data center virtualization, consolidation, and simplified management of software licenses and professional services, catering to the needs of remote work, online collaboration, and digital services. As organizations prioritize data security and embrace digital technology and connected devices, HCI emerges as a pivotal solution, offering scalable, efficient, and secure infrastructure for modern businesses.

Further, the market is experiencing significant growth driven by various key components and trends. Organizations are increasingly recognizing the need to address hardware requirements in a more efficient and integrated manner, leading to the adoption of HCI solutions. These solutions often leverage advanced storage technologies like Solid-State Drives (SSDs), which offer improved performance and reliability compared to traditional spinning disks. Moreover, the market is witnessing a trend towards infrastructure refresh as companies seek to modernize their IT environments. HCI solutions play a crucial role in this process by providing scalable and consolidated infrastructure that can handle diverse workloads, including servers, within a commodity datacenter framework.

Market Scope
Report Coverage	Details
Page number	174
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 27.98%
Market growth 2023-2027	USD 58.94 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	29.56
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 47%
Key countries	US, China, India, Germany, and UK
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	AT and T Inc., Cisco Systems Inc., DataCore Software Corp., Dell Technologies Inc., Dynamic Network Factory Inc., FurUKawa Electric Co. Ltd., Hewlett Packard Enterprise Co., Hitachi Ltd., HiveIO Inc., Huawei Technologies Co. Ltd., Lenovo Group Ltd., Lumen Technologies Inc., Maxta Inc., Microsoft Corp., Nutanix Inc., Olabs Technology Co. Ltd., Quantum Corp., Scale Computing, StarWind Software Inc., and VMware Inc.
Market dynamics	Parent market analysis, Market forecasting, market growth analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming market trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• A thorough market growth and forecasting analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market forecast analysis of factors that will challenge the growth of market companies

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