IDC announces that global converged systems market grows 3.5 percent year over year during the third quarter

According to data released this week by the IDC Worldwide Quarterly Converged Systems Tracker, global converged systems market revenue increased 3.5 percent year over year to US$3.75 billion during the third quarter of this year. 

IDC's converged systems market view offers three segments: certified reference systems and integrated infrastructure, integrated platforms, and hyperconverged systems. The certified reference systems and integrated infrastructure market generated roughly $1.26 billion in revenue during the third quarter, which represents a contraction of 8.4 percent year over year and 33.7 percent of all converged systems revenue. 

Integrated platforms sales declined 13.9 percent year over year in the third quarter of this year, generating $475 million worth of sales. This amounted to 12.6 percent of the total converged systems market revenue. 

Revenue from hyperconverged systems sales grew 18.7 percent year over year during the third quarter of 2019, generating nearly $2.02 billion worth of sales. This amounted to 53.7 percent of the total converged systems market.

"The converged systems market continues to grow despite a challenging overall datacenter infrastructure environment," said Sebastian Lagana, research manager, Infrastructure Platforms and Technologies at IDC. "In particular, hyperconverged solutions remain in demand as vendors do an excellent job positioning the solutions as an ideal framework for hybrid, multi-cloud environments due to their software-defined nature and ease of integration into premises-agnostic environments."

IDC offers two ways to rank technology suppliers within the hyperconverged systems market: by the brand of the hyperconverged solution or by the owner of the software providing the core hyperconverged capabilities. 

As the data relates to the branded view of the hyperconverged systems market, Dell Technologies was the largest supplier with $708.4 million in revenue and a 35.1 percent share. Nutanix generated $262.2 million in branded hardware revenue, representing 13.0 percent of the total HCI market during the quarter. There was a three-way tie for third between Cisco, Hewlett Packard Enterprise, and Lenovo, generating $109.0 million, $91.9 million, and $91.5 million in revenue each, which represents 5.4 percent, 4.6 percent, and 4.5 percent share of the market share respectively. 

From the software ownership view of the market, new systems running VMware hyperconverged software represented $766.2 million in total in the third quarter of this year vendor revenue, or 38.0 percent of the total market. Systems running Nutanix hyperconverged software represented $549.2 million in third quarter vendor revenue or 27.2 percent of the total market. Both amounts represent the value of all HCI hardware, HCI software, and system infrastructure software sold, regardless of how it was branded at the hardware level. 

IDC finds that the refresh cycle of Surface and iPad will keep tablets market alive in the EMEA region

The EMEA tablet market reached 10.9 million units in the third quarter of the year, a drop of 8.2 percent on the same quarter last year, according to data from IDC. The contraction in consumer demand continues to be the main inhibitor of tablet adoption. 

As consumers lack compelling reasons to refresh their devices, life cycles continuously increase, leading to a market slowdown. However, the deployment of tablets in the commercial segments remains healthy, with a 4.2 percent year-on-year increase, due to the larger number of usage scenarios generated by digital transformation.

"In a quarter usually marked by seasonality, where there is a balance between the top two companies, Apple maintained and consolidated its market leadership," said Helena Ferreira, research analyst, IDC Western Europe Personal Computing Devices. "The growing market saturation is driving consolidation, as the top five companies become increasingly dominant, and in developed economies, like in Western Europe, the top five represented more than three-quarters of the market."   

The overall tablet market in Western Europe declined 6.0 percent year-on-year in the third quarter of this year, while and Eastern Europe, the Middle East, and Africa (CEMA) declined 12.0 percent year-on-year.

"Slate tablet shipments are continuing to drag down overall tablet results in both CEE and MEA, mostly due to the consumer consumption slowdown and significant drops in below-10in. tablets, due to stiff competition from large-screen smartphones," said Nikolina Jurisic, program manager, IDC CEMA.

Apple retained the market leadership in EMEA, ahead of its product refresh cycle. Samsung posted a double-digit decline, as the main focus is on pushing its prosumer S series and driving more profitability. Lenovo regained third position, filling the gap left by Huawei's decline. 

Huawei dropped to fourth and continues to suffer from the impact of the ban on consumer confidence. Amazon remained in the top 5 and continues to dominate the ultra-low-end price ranges, particularly during promotional periods such as Prime Day in the third quarter.

The EMEA tablet market is forecast to decline by 10.2 percent year-on-year in both the fourth quarter and for the whole year 2019. The dynamics affecting the market, particularly in the consumer segment, are expected to persist both in the consumer and in the commercial segments in the coming quarters.

"Despite the decline in total units shipped, the tier A vendors will sustain market value, particularly through the most recent iterations of iPad and Surface," said Daniel Goncalves, senior research analyst, IDC Western Europe Personal Computing Devices. "The new iPad with a first party keyboard and a new operating system designed to enhance productivity features in a tablet environment is expected to generate interest among prosumers and to continue boosting renewals of old tablets. On the other hand, the adoption of Surface Pro as a notebook replacement is expected to continue to thrive and to increasingly drive horizontal deployments in enterprise." 

The commercial market in EMEA is forecast to grow at a CAGR of 4.6 percent between 2019 and 2023.

"In the long run, the commercial segment is expected to grow due to the transition to mobility and growing user case scenarios for deploying tablets into businesses," said Jurisic.

IDC reveals that the global Ethernet switch and router sector made marginal gains in the third quarter this year

Research firm IDC released Friday data on the global Ethernet switch market (Layer 2/3) that recorded US$7.32 billion in revenue in the third quarter of 2019, an increase of 0.1 percent year over year. Meanwhile, worldwide total enterprise and service provider (SP) router market revenues grew 0.8 percent year over year in the third quarter this year to $3.74 billion. These results were published Friday in the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker. 

The Worldwide Quarterly Ethernet Switch Tracker and the Worldwide Quarterly Router Tracker provide total market size and vendor shares for the Ethernet switch and router technologies in an Excel pivot table format. The geographic coverage for both the Ethernet switch market and the router market includes eight major regions (USA, Canada, Latin America, Asia/Pacific (excluding Japan), Japan, Western Europe, Central and Eastern Europe, and Middle East and Africa) and 60 countries. 

The Ethernet switch market is further segmented by speed (100Mb, 1000Mb, 10Gb, 25Gb, 40Gb, 50Gb, 100Gb), product (fixed managed, fixed unmanaged, modular), and layer (L2, L3, ADC). Measurement for the Ethernet switch market is provided in vendor revenue, value, and port shipments. The router market is further split by product (high-end, mid-range, low-end, SOHO), deployment (service provider, enterprise), connectivity (core, edge), and the measurements are in vendor revenue, value, and unit shipments.

From a geographic perspective, the third quarter of this year Ethernet switch market delivered mixed results across the globe. The Middle East and Africa region grew 9.3 percent with the region's largest market, the United Arab Emirates, growing 6.9 percent year over year while Israel's market grew 18.8 percent. Across Europe, growth was stagnant. 

The Central and Eastern Europe (CEE) region lost 9.0 percent compared to a year earlier with Russia dropping 13.9 percent year over year. The Western Europe market fell 6.1 percent with Germany losing 5.6 percent year over year. Denmark was a bright spot in the region with 18.6 percent year-over-year growth. 

The Asia/Pacific (excluding Japan) (APeJ) region grew 1.3 percent year over year. In China, the market grew 4.6 percent year over year while the Philippines rose 25.9 percent. Japan was off 3.8 percent compared to its growth in the third quarter last year. In Latin America, the market dropped 4.4 percent year over year, while the U.S. market grew 2.6 percent annually and Canada declined 4.9 percent year over year. 

"The over-arching trend driving both the Ethernet switch and router markets continues to be enterprise, communications service provider, and cloud SP investments in agile cloud connectivity to meet the needs of their business and customers," said Rohit Mehra, vice president, Network Infrastructure at IDC. "The demand for higher speeds across a range of network connectivity options will spur growth in these markets in the coming years as bandwidth needs increase and mission-critical applications demand even lower latencies." 

Growth in the Ethernet switch market continues to be driven by the highest-speed switching platforms. For example, port shipments for 100Gb switches rose 57.2 percent year over year to 5.6 million. 100Gb revenues grew 32.8 percent year over year in the third quarter this year to $1.44 billion, making up 19.6 percent of total market revenue compared to 14.8 percent a year earlier. 

25Gb switches also saw growth with revenues increasing 69.3 percent to $463.4 million and port shipments growing 68.0 percent year over year. Lower-speed campus switches, a more mature part of the market, saw moderate growth in port shipments but declining revenue, pointing to a decrease in average selling prices (ASPs). 

10Gb port shipments rose 7.9 percent year over year, but revenue declined 8.7 percent to deliver 26.3 percent of total market revenue. 1Gb switches grew 3.9 percent year over year in port shipments but declined 7.4 percent in revenue. 1Gb now accounts for 39.2 percent of the total Ethernet switch market revenue. 

The worldwide enterprise and service provider router market increased 0.8 percent on a year-over-year basis in the third quarter this year with the major service provider segment, which accounts for 75.5 percent of revenues, decreasing 0.1 percent and the enterprise segment of the market growing 3.6 percent. 

From a regional perspective, the combined service provider and enterprise router market fell 1.5 percent in APeJ with the enterprise segment growing 1.5 percent and the service provider segment declining 2.2 percent year over year. Japan's total market grew 3.9 percent year over year. 

Revenues in Western Europe were off 7.3 percent year over year while CEE revenues for the combined enterprise and service provider market grew 3.5 percent year over year. The Middle East & Africa region was up 8.9 percent. In the U.S., the enterprise segment was up 7.3 percent while service provider revenues grew 1.8 percent, giving the combined markets 3.2 percent year-over-year growth. In Latin America, the market grew 11.7 percent. 

Cisco finished the thrid quarter this year with a 5.6 percent year-over-year decline in overall Ethernet switch revenues and market share of 51.3 percent. In the hotly contested 25Gb/100Gb segment, Cisco was the market leader with 38.2 percent revenue share. Cisco's combined service provider and enterprise router revenue declined 10.6 percent year over year with enterprise router revenue increasing 3.4 percent and SP revenues falling 18.1 percent. Cisco's combined SP and enterprise router market share increased to 37.9 percent, up from 36.8 percent in the second quarter of this year. 

Huawei's Ethernet switch revenue rose 4.4 percent on an annualized basis, giving the company market share of 8.9 percent. The company's combined SP and enterprise router revenue rose 20.6 percent year over year, giving the company a market share of 28.1 percent. 

Arista Networks saw Ethernet switch revenues increase 14.3 percent in the third quarter, bringing its share to 7.6 percent of the total market, up from 6.6 percent a year earlier. 100Gb revenues accounting for 68.8 percent of the company's total revenue, indicating the company's focus on hyperscale and cloud providers. 

HPE's Ethernet switch revenue declined 7.0 percent year over year, resulting in overall market share of 5.3 percent. 

Juniper's Ethernet switch revenue rose 4.5 percent year over year in the third quarter this year, bringing its market share to 3.2 percent. Juniper saw a 17.9 percent decline in combined enterprise and SP router sales, bringing its market share in the router market to 10.9 percent. 

"Dynamics in the Ethernet switch and routing markets continue to evolve," said Petr Jirovsky, research director, IDC Networking Trackers. "In Ethernet switching, the seemingly insatiable demand for higher-speed networking platforms continue to drive investments. Meanwhile, lower-speed campus switching continues to moderate as enterprises build out connectivity platforms to support mobile workers and the Internet of Things. In the routing segment, the enterprise continues to buoy the broader market as enterprises and service providers augment their networks to support improved cloud connectivity."

Global enterprise external OEM storage systems market revenue grows by a mere 1.3 percent for the third quarter, IDC reveals

According to IDC Worldwide Quarterly Enterprise Storage Systems Tracker, global spending on enterprise external OEM storage systems grew 1.3 percent year over year to US$6.6 billion during the third quarter of this year. 

Total external OEM storage capacity shipments were up 6.8 percent year over year to 17.3 exabytes during the quarter. Revenue generated by the group of original design manufacturers (ODMs) selling directly to hyperscale data centers declined 6.8 percent year over year in the thrid quarter this year to $5.8 billion. 

Total market capacity shipments (External OEM + ODM Direct + Server-Based Storage) declined 13.9 percent to 98.8 exabytes.

Dell Technologies was the largest enterprise external OEM storage systems supplier during the quarter, accounting for 31.5 percent of global revenue. NetApp and HPE/New H3C Group tied for second with 9.9 percent and 9.6 percent of the market, respectively. 

Huawei, Hitachi, and IBM tied for the fourth position with revenue shares of 7.0 percent, 6.2 percent and 6.0 percent, respectively. Despite growing and gaining market share during the third quarter, Pure Storage and Lenovo did not finish among the top 5 companies. 

The total All Flash Array (AFA) market generated $2.58 billion in revenue during the quarter, up 11.7 percent year over year. The Hybrid Flash Array (HFA) market was worth slightly less than $2.54 billion in revenue, down 1.7 percent from the third quarter last year. 

On a geographic basis, Asia/Pacific (excluding Japan) grew the fastest of any region, up 12.5 percent year over year. Japan grew 2.5 percent; Europe, the Middle East, and Africa (EMEA) was down 1.0 percent; and the Americas declined 2.7 percent. China as a standalone country grew 20.4 percent year over year in the third quarter this year.

IDC reports 0.8 percent rise in global smartphone shipments in third quarter, as Huawei went full steam in China

Worldwide smartphone shipments increased 0.8 percent year over year in the third quarter of 2019 after seven quarters of decline, according to new data released Thursday by research firm International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. In total, companies shipped a total 358.3 million smartphones during the quarter, which was up 8.1 percent from the previous quarter and enough to return the industry to positive growth. 

Digging into the growth areas, India led emerging markets in total, which together were responsible for propelling worldwide growth, mainly from the rise of Chinese brands. In China, greater consolidation toward the top 5 brands was the main trend in the quarter. 

The top Chinese brands all increased their local shipments in preparation for 11.11 or "Singles' Day," the Chinese equivalent of Black Friday for shopping in the U.S. 

Samsung gained share in 3Q19 with annual growth of 8.3 percent on the back of the Galaxy Note 10 launch in August and increased A series volumes, with a total of 78.2 million smartphones shipped. The lower-end to midrange A series in particular helped to fill in the gaps left behind by Huawei. 

Huawei shipped higher volumes than expected as it shifted focus to its domestic market, particularly in lower-tier cities, and increased inventories given the unknown future with Google Mobile services. 

While a sentiment of nationalism has helped to bolster Huawei in China, solid relationships with the local channel players has been key, offering favorable distributor terms and a well-rounded product portfolio. Nevertheless, there will be challenges ahead with 4G inventory to clear while consumers wait for affordable 5G products to hit the market. 

Apple shipped 46.6 million iPhones in the third quarter this year, which was a slight decline year over year but still better than most expectations. Apple continues to sell some refurbished iPhones via its own channels, which sustain and possibly grow the installed base, but also impact iPhone revenues. Newer iPhones, specifically the iPhone 11s and XR, did very well this quarter, capturing strong share in important markets like the U.S. and Western Europe. 

Xiaomi for the first time saw less than a third of its shipments delivered domestically in China, which was second to India in volume. Domestically, despite its launch of the CC series to appeal to young female consumers, shipments declined under pressure from Huawei. 

The runway was clearer for Xiaomi in India, however, where it strengthened its offline presence by expanding its sales network via the Mi Store and Mi Preferred Partners. 

OPPO also focused its attention outside of China as it approached the tipping point of nearly half of its shipments outside of China with domestic shipments focused on the Reno series and the A9. India experienced the strongest momentum internationally where the Reno series helped complete its product portfolio with higher-end offerings while the online-exclusive K series strengthened its online presence. 

"Despite facing challenges across many international markets, Huawei doubled down on China in the third quarter," said Melissa Chau, associate research director with IDC's Worldwide Mobile Device Trackers. "Samsung benefited the most internationally from Huawei's woes, ramping up the more affordable A series, while in China the other domestic competitors felt the heat from Huawei." 

"The market returning to positive growth shows the resilience of this industry as well as the ongoing demand for mobile phones, all in the face of many global macroeconomic challenges," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers. "The number of factors in play for competition are incredible. It is clear Huawei continues to make big gains in China, which remains the world's largest market. Apple beat many expectations and is driving strong volumes in mature markets that face equally challenging headwinds. And most importantly, the top 5 OEMs accounted for more than 70 percent of the world's smartphone shipments for the first time ever this quarter. The industry and vendor landscape is still changing but the trend of consolidation is ramping along with it."

PTC completes OnShape acquisition; drives market transition to SaaS model

PTC announced that it has completed its acquisition of Onshape, developer of the Onshape Software as a Service (SaaS) product development platform that unites robust computer aided design (CAD) software with data management and collaboration tools. The acquisition positions PTC to capitalize on the inevitable industry transition to SaaS.

Onshape will operate as a SaaS business unit within PTC with Jon Hirschtick, president of Onshape, reporting directly to Jim Heppelmann, president and CEO of PTC. Barclays acted as exclusive financial advisor to PTC on the transaction.

The SaaS model, while nascent in the CAD and product lifecycle management (PLM) markets, is rapidly becoming industry best practice across most other software domains. 

IDC's research shows manufacturers are looking to the cloud to support specific innovation-related processes such as design review, supplier collaboration, quality management, and service execution.

Located in Cambridge, Massachusetts, Onshape was founded in 2012 by CAD pioneers and tech legends, including Jon Hirschtick, John McEleney, and Dave Corcoran, inventors and former executives of SolidWorks. Onshape has secured more than $150 million in funding from leading venture capital firms and has more than 5,000 subscribers around the world. 

The company’s software offering is delivered in a SaaS model, making it accessible from any connected location or device, eliminating the need for costly hardware and administrative staff to maintain. 

Distributed and mobile teams of designers, engineers and others can benefit from the product’s cloud nature, enabling them to improve collaboration, and reduce the time needed to bring new products to market – while simultaneously staying current with the latest software.