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Nutanix's initial public offering in September signaled a tipping point in the hyper-converged market. The hyper-converged vendor landscape that was once filled with small, private companies is now dominated by larger server-storage vendors.
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The newly public Nutanix remains the market leader, but VMware has more customers for its Virtual SAN (VSAN) hyper-converged software. Dell EMC is looking to corner the market in 2017 by selling both VSAN and Nutanix software on PowerEdge servers. Hewlett Packard Enterprise, Cisco and Lenovo are also making strong pushes. The trio sells their servers with their own or partners' software.
But smaller private hyper-convergence vendors, such as SimpliVity, Pivot3 and Scale Computing, are determined to not go away quietly. They have designs on their own IPOs, and can provide lucrative acquisition targets for large vendors that have yet to jump into hyper-convergence, such as IBM and NetApp.
These smaller vendors -- including software-only alternatives from Atlantis Computing, Maxta, StorMagic and Stratoscale -- say their products have proved themselves and are superior to new versions from the large vendors. They will need any technology advantage they can get over the large marketing giants they now compete against.
"We've spent more time and investment in this technology than anybody," said Doron Kempel, SimpliVity CEO and chairman. "We spent 43 months developing our own file system. We've focused on having the best data services platform on the market. It's too late for others to catch up to us."
"We're just at the tip of the iceberg," Scale Computing CEO and founder Jeff Ready said of hyper-convergence. "The big storage and server vendors used to say hyper-convergence was not a real thing, or was just re-packaging. Now they say, 'Hey, we have that too.' So they've shifted to saying they have that thing that they used to say wasn't a real thing. Now that Nutanix is a multibillion-dollar company, these other vendors look stupid if they don't have it."
SimpliVity counts on data reduction, protection
SimpliVity joined Nutanix as a leader in the Gartner Magic Quadrant for integrated systems and the Forrester Wave hyper-converged reports this year. They were the only hyper-convergence vendors to show up as leaders in both reports.
SimpliVity started selling its OmniCube hyper-converged system in 2012, a year after Nutanix entered the market. Despite recent layoffs and cutbacks, SimpliVity's Kempel said it could follow Nutanix's IPO by the same amount of time.
"If we can grow as fast as we've been growing, we'll probably be ready for our own IPO the same time next year," he said. "It's not a necessity for us, but something we'll do as an accelerant."
SimpliVity tries to stand out with its data protection and reduction features. It concentrates on collapsing more than servers and virtualization into hyper-converged appliances. SimpliVity's OmniStack Data Virtualization Platform includes an accelerator card to offload deduplication and compression from the CPU and built-in backup and replication for off-site disaster recovery.
Kempel claims half of SimpliVity's customers use no other backup products for data stored on OmniCubes. That helps SimpliVity compete against other hyper-converged systems as well as vendors such as Cohesity and Rubrik that converge secondary data.
"The assumption is hyper-convergence is storage in a server," Kempel said. "In our case, hyper-convergence includes all backup, disaster recovery, data movement, and the data efficiency in our case is native. We dedupe across all stages of the data lifecycle. Other hyper-converged products use third-party products for backup and other things."
SimpliVity is still playing catch-up with solid-state drives in its appliances, however. SimpliVity launched its first all-flash appliances in August and still has limited options for OmniCubes without hard disk drives.
Pivot3 revs up quality of service
Pivot3 is also making moves that could lead to it becoming a public company. Over the past three months, the vendor added former Micron CFO Bill Stover as CFO and hired Cisco and Seagate veteran Jamie Lerner as chief revenue officer.
Pivot3 actually began selling hyper-converged appliances in 2007, before the term was used. Pivot3's early marketing focused on storage for video surveillance. It has made a strong push into the general hyper-converged market over the past two years and claims more than 2,000 customers. The key to its future could be the quality of service technology it picked up in a January 2016 acquisition of NexGen Storage, and is still integrating into its vSTAC appliances.
Quality of service is a key feature to let customers run multiple applications efficiently on hyper-converged boxes. In the early days of hyper-convergence, the appliances were usually used for a single application, such as virtual desktop infrastructure or in remote offices.
Pivot3 CEO and chairman, Ron Nash, said there is room for at least one more hyper-convergence vendor to follow Nutanix as a public company. "You can build the next Hewlett-Packard or VMware in this wave," he said.
Gartner put Pivot3 in its visionary category in converged infrastructure, and Forrester listed it as a leader along with Nutanix and SimpliVity in its August Forrester Wave hyper-converged report. Nash said Pivot3 inserted storage features such as fault tolerance, automatic load balancing, performance aggregation and erasure coding in its vSTAC operating system from the start.
"Because you can use VMware and other hypervisors, it's easy to do the processing side," he said. "But to do the storage side efficiently, it's a long, long exercise. We had a 35-man, highly experienced development team working five-and-a-half years to get the storage side working efficiently with erasure coding and things like that. That's how long it took us to get erasure coding working efficiently in a distributed way, with high performance."
Pivot3 said it more than doubled year-over-year revenue growth last quarter. Its latest product is Edge Office, a product for small companies and remote offices that can start with one node.
It still faces technical limitations, such as support for hypervisors beyond VMware and lack of integrated data protection.
Scale wants to dominate SMB market
Scale Computing is little known in enterprise circles but Ready said he is more than happy to compete in the SMB market. He expects Scale to hit break-even in early 2017. Scale claims more than 1,500 customers and 5,500 systems deployed.
"Our competitors drive past 100 of our customers between the airport and the big prospect they're visiting," he said.
Scale also recently added a single-node HC3 appliance for remote offices and DR. The vendor focuses on easy installation and management at a lower price than most hyper-converged systems. It also added flash appliances and automatic tiering this year.
Unlike other hyper-converged vendors that started out by offering storage that VMware customers could provision and manage, Scale went after non-VMware shops. Its HC3 hyper-converged appliances include open-source KVM-based virtualization for organizations that can't afford or don't want to pay VMware licenses.
"We've positioned ourselves as a VMware-alternative," Ready said. "If your VMware license is up for renewal, this is your alternative path to buying more storage or more servers. I always view VMware as my main competition. Most of the other hyper-converged guys only support VMware, so it's different for us. VSAN is a footnote for us, because if you get VMware out of there, you get VSAN out of there."
Lack of VMware support also limits Scale's target installed base, however. The vendor will also face greater competition among SMBs as hyper-convergence vendors start to bring their appliances down-market at a lower price.
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