Hyper-Converged Infrastructure Market Size, Share, Growth & Industry Analysis, By Component (Solutions, Services), By Application (Remote Office/Branch Office, Virtual Desktop Infrastructure, Data Center Consolidation, Data Protection & Disaster Recovery, and Others), By End-user (Banking, Financial Services, and Insurance (BFSI), IT and Telecom, Manufacturing, Government, Healthcare, and Others), and Regional Forecast, 2024-2032

The global hyper-converged infrastructure market size was valued at USD 9.66 billion in 2023 and is projected to grow from USD 11.98 billion in 2024 to USD 61.49 billion by 2032, exhibiting a CAGR of 22.7% during the forecast period. North America dominated the global hyper-converged infrastructure market with a share of 46.38% in 2023.

The scope of the study includes key players such as Dell Technologies, Nutanix Inc., and Hewlett Packard Enterprise Company. These companies are offering components such as solutions and services. For instance, Nutanix provides hyper- HCI software solutions. Similarly, Dell Technologies offers Dell EMC VxRail, a Hyperconverged Infrastructure system. Dell VxRail delivers high performance in several applications, including graphics, storage, and cost requirements. Further, Hewlett Packard Enterprise Company offers HPE SimpliVity 325 Gen 10 Hyper-Converged Infrastructure solution with next-generation AMD EPYCTM processor.

Rising demand for modernizing the data centers with the help of Hyper-Converged Infrastructure systems to accelerate the business growth aids the Hyper-Converged Infrastructure market growth. It is a software-defined infrastructure model used for data center consolidations to provide cost savings and enhance operational efficiencies. Key players in the market are focused on developing advanced Hyper-Converged Infrastructure solutions to expand their businesses. For instance,

• In February 2021: Microsoft Corporation launched the availability of advanced Hyperconverged Infrastructure Azure Stack solution that combines scalability and price-performance advantage. It has native Azure hybrid capabilities and can be used for data center modernizations and consolidations.

Increasing usage for desktop virtualization, owing to rising work from home situations during the COVID-19 pandemic could aid the market growth. Also, the rising demand for data protection and disaster recovery in the IT and telecommunication sectors has propelled the market growth.

Hyper-Converged Infrastructure Market Trends

Growing Number of Digital Businesses Transformation Initiatives Aids Market Growth

HCI reduces the requirement for substantial IT server and storage management resources. Hyper-Converged Infrastructure solution makes it easier to migrate the data and deploy hybrid cloud. Increasing adoption of Hyper Converged Infrastructure solutions for digital transformation in the end-user industries, such as retail & e-commerce, healthcare, IT & telecom, and others, has propelled the market growth. For instance,

• In September 2021: FLOWERS.COM, Inc., an e-commerce retailer company, adopted digital technologies, such as artificial intelligence, augmented reality, and Hyper Converged Infrastructure solutions, to help transform businesses.

Further, several leading players are launching advanced technology platforms and hardware solutions for enhancing their storage capabilities. For instance,

• In November 2021: VMware launched software-defined HCI Mesh solutions. The advanced solution offers deployment flexibility to compute and storage disaggregation and expands native file services capabilities.

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Hyper-Converged Infrastructure Market Growth Factors

Increasing Demand for Data Security and Data Recovery using Advanced HCI Services Drives Market Growth

Increasing adoption of Hyper-Converged Infrastructure services, such as disaster recovery and data security, is driving the growth of the market. Also, the growing adoption of digital technology platforms, such as social media and knowledge platforms, has surged the demand for HCI. According to a study published in 2023, the average total cost of a ransomware breach was over USD 4.45 million in 2023. This data was recorded to be over 15 percent increase in the past three years. The price includes both personal and corporate penalties for data breaches. Hyper Converged solutions are used to reduce the risk of data security breaches with the help of specific components applications. It also includes a high-security AMD processor suite with security features that minimizes security risks.

Rising Demand for Data Centre Consolidation with Surge in Digital Transformations Supports Growth

Rising digital transformation in data centers using HCI solutions drives the market growth. The solutions are used for data center modernization and consolidation using the compute storage network. It creates a software-defined virtualized environment that is easier to scale up and out the data center capabilities. The solutions help to improve the performance and reduce operational costs. Rising investment for the data center infrastructure development is expected to witness potential opportunity for market growth. For instance,

• In September 2021: Techno Electric and Engineering Company (TEECL) Power Infrastructure Company planned an investment of USD 1 billion to establish advanced data centers across major cities in India.

RESTRAINING FACTORS

Compatibility Issue and High Power Requirements Hinder Market Growth

Hyper Converged architectures include computing, networking, and storage systems in a single environment. It is subject to considerable workloads in a limited space, requiring more power than traditional data centers. Thus, to tackle this, some workloads need to migrate to cloud storage, requiring additional hardware and power. The requirement for high power is hindering the market growth. Also, Hyper Converged solutions need to ensure enough power and cooling to meet the workload demand. It can come with additional costs.

Further, HCI solutions are subjected to compatibility issues. Different manufacturers have different software and hardware sets, so it is difficult for consumers to adopt these HCI solutions. This compatibility issue, additional cost, and high power requirement for the equipment hinder the market growth.

Hyper-Converged Infrastructure Market Segmentation Analysis

By Component Analysis

Advancement of the Compact Hardware Solutions to Strengthen the Market Growth

Based on component, the market is divided into solutions and services. Among these, the solutions segment is projected to dominate the market with the largest share. This is primarily attributed to the rising development of compact hardware systems by the leading players in the market. For instance,

• In May 2021: Dell Technologies launched managed storage, server, and Hyper Converged Infrastructure hardware solutions. It can be deployed for data center consolidation at edge locations. It is used for cloud services storage and streamlined management.

Also, the services segment is expected to grow with the highest CAGR during the forecast period. This is primarily attributed to rising businesses’ digital transformation around the globe. According to the McKinsey & Company Report in 2020, digital technology adoption rate increased from 36% to 58% globally during the COVID-19 pandemic. This would boost the adoption of services during the forecast period.

By Application Analysis

Virtual Desktop Infrastructure Expected to Have Major Share Owing to ‘Work from Home’ and ‘BYOD’ Trends

Based on application, the market is divided into a remote office/branch office, virtual desktop infrastructure, data center consolidation, data protection and disaster recovery, and others (server virtualizations).

Among these, the virtual desktop infrastructure segment is projected to have a major Hyper-Converged Infrastructure market share during the forecast period. This is primarily attributed to the emerging trends, such as Bring Your Device (BYOD) and surge in work from home from remote locations. According to Remote Work & Compensation Pulse Survey in May 2021, 48% of respondents (employees) expressed their wish to work remotely. In addition, over 44% desired a hybrid work model. However, among employers, only 5% mentioned working remotely and 51% support the hybrid working arrangement. Virtual desktop infrastructure is the centralized system used to manage remote employees’ devices.

Remote office/branch office, virtual desktop infrastructure, data center consolidation, data protection, disaster recovery, and others are also growing steadily. Data protection and disaster recovery applications segment are increasing with the highest CAGR during the forecast period, owing to the rising number of data breaching cases. For instance, according to the U.S. Department of Health and Human Services, an estimated 98.2 million individuals in the U.S. were impacted by data breaches in the first quarter of 2021. Such an increase in data breaches has strengthened the demand for data protection and disaster recovery application.

By End-user Analysis

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Increasing Demand for Data Protection in the Banking Industry to Boost Market Growth

Based on end-user, the market is divided into banking, financial services and insurance (BFSI), IT and telecom, manufacturing, government, healthcare, and others (education). The banking, financial services and insurance (BFSI) sector holds the highest share in 2023. This is primarily attributed to the rising demand for data storage and protection in the financial and insurance sector.

The IT and telecom sector is anticipated to grow with the highest CAGR during the forecast period. This is primarily attributed to the rising digital transformation of businesses and surging IT investments by the leading players. For instance, in 2020, the International Finance Corporation invested around USD 8 billion in the IT and telecommunications sector. Such an increase in the funding for IT infrastructure development drives the market growth.

REGIONAL INSIGHTS

The market has been analyzed across five major regions, North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

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North America held the highest market share in 2023 in the global market. This is primarily attributed to the presence of leading players such as Dell Technologies, Hewlett Packard Enterprise Company, IBM Corporation, Microsoft Corporation, and others. Also, increasing investment for the data center infrastructure establishment and modernization in this region aid the market growth. Such rise in data center infrastructure across North America has propelled the market growth.

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Asia Pacific is predicted to grow with the highest CAGR during the forecast period. This is primarily attributed to rising investment by the major players across the region. For instance,

• In April 2021, Microsoft Corporation planned to invest around USD 1 billion in Malaysia by partnering with local companies and government agencies to set up a new data center. Such investment for the data center establishment is expected to create ample opportunities for market growth.

Europe is growing with a stable CAGR during the forecast period. Rising digital transformation initiatives by the leading players with increasing investments for the data center establishment drive the market growth. For instance,

• In November 2021, the European Commission launched the Digital Europe Programme with funding of USD 2.24 billion for digital transformations of businesses. The Digital Europe Programme aimed to bolster Europe's digital technology adoption for public administrations and small & medium enterprises.


• In September 2021, Google invested around USD 1.13 billion in Germany to expand cloud data centers using renewable energy sources.

South America is expected to grow substantially during the forecast period owing to increasing investment by the leading players and the rising number of digital start-ups in Brazil. For instance, according to a study in relation to digital entrepreneurship, Colombia and Brazil are among the top countries that have led investments in the startup-related landscape. Over USD 4.6 billion was invested in 2019 to promote the digital entrepreneurship ecosystem and help develop tools for different areas across the region. Such an increase in digital technology start-up investment in Brazil has strengthened the market growth.

During the forecast period, the Middle East & African countries, such as Saudi Arabia, South Africa, and other GCC countries, are expected to grow considerably. This is primarily owing to the surge in development of advanced HCI-based data centers and rising government initiatives for digital transformations. For instance,

• In May 2021: Amazon.com Inc.’s subsidiary Amazon Web Services (AWS) planned to open three new data center infrastructures in the United Arab Emirates (UAE). That is expected to complete by 2022.

List of Key Companies in Hyper-Converged Infrastructure Market

Product Launch & Expansion Strategy to Lead to High Competition among Key Market Players

Key players operating in the market have been engaged in developing enhanced HCI solutions to cater to the user’s evolving requirements. These players are also continuously engaged in acquiring relevant small-scale players and collaborating with strategic partners that contribute to product expertise and help in global expansion. This strategy helps them to gain a strong competitive edge over other companies in the market. Companies adopt this strategy to combine the finest of their expertise with the capabilities of the firms they acquire. The products built from this approach effectively cater to the changing requirements of the users.

List of Key Companies Profiled:

• Dell Inc. (U.S.)


• Broadcom (U.S.)


• Nutanix (U.S.)


• DataCore Software (U.S.)


• Hewlett Packard Enterprise Development LP (U.S.)


• NetApp, Inc. (U.S.)


• Huawei Technologies Co., Ltd. (China)


• IBM Corporation (U.S.)


• Microsoft Corporation (U.S.)


• StorMagic (U.K.)

KEY INDUSTRY DEVELOPMENTS:

• July 2023: A well-organized two-day workshop was conducted by The Consortium for Technical Education that was focused on HyperConverged Infrastructure Solutions at Tamil Nadu’s CTE Learning Center. The event gathered faculties and students from the Information Technology Engineering department on 19th and 20th July 2023 with the aim of educating them on leveraging the capabilities of HCI products.


• June 2022: xFusion introduced FusionOne for the Azure Stack HCI tool, which is available on the Microsoft Azure Stack HCI catalog. The solution is made available on the FusionServer 2288H V6 server, which powers Microsoft Azure Stack HCI in hosting enterprise-class hybrid cloud. The newly launched service offers enhanced performance, hybrid, and security expertise, including Azure Arc enablement and new management scenarios through the Azure portal.


• July 2021: Microsoft Corporation planned to invest around USD 2 billion to open a data center in Telangana State in India. Telangana government has supported setting up a data center in this region.


• September 2020: Lenovo Corporation’s Data Center Group expanded its Hyper Converged Infrastructure capability in order to meet the growing demand for cloud services across remote work environments. Hyper-Converged Infrastructure solution plays a vital role in the growing hybrid cloud and data center infrastructure requirements. The solutions support virtual desktop infrastructure that helps to connect remote working people.


• September 2020 – Nutanix Inc. developed Hyper-Converged Infrastructure software with hybrid cloud capabilities. This software facilitates 50% faster performance and virtual networking. It includes two advanced cloud-based software offerings, security monitoring, and provides security compliance.

REPORT COVERAGE

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The global market research report is studied across five key regions to get a better understanding of the market as a whole. The report provides the end user with useful insights into the latest industry use cases and market trends, opportunities, future scope, and technological capabilities of the solutions in the market. Along with this, major investments and other factors that influence the market are also considered while studying the market.

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