Cisco Bids Farewell to HyperFlex: Navigating a Shifting Market
In a strategic move reflecting "evolving customer needs and market dynamics," Cisco announced to The Register today that it is discontinuing its HyperFlex hyperconverged infrastructure (HCI).
HyperFlex, which combined a hybrid cloud software stack with Cisco’s Unified Computing System (UCS) servers, aimed to compete with VMware, Dell’s vXRail, Nutanix, and HPE’s HCI solutions. However, the growing influence of hyperscalers like Oracle, which recently introduced an on-premises cloud competing with larger HCI systems, presented significant challenges.
Cisco has not provided a detailed rationale for discontinuing HyperFlex, stating only that the decision was "timed to best support our customers, partners, and employees.
Despite this, a Cisco spokesperson emphasized the company's ongoing commitment to simplifying hybrid multi-cloud operations. In an interesting twist, Cisco has partnered with Nutanix, allowing Nutanix’s software stack to run on Cisco hardware.
This partnership also enables Cisco salespeople to sell these combined solutions, earning commissions even on Nutanix software.
HyperFlex customers will receive five years of support and service, but those using VMware’s ESXi hypervisor with HyperFlex face complications.
Cisco will not certify future versions of ESXi on its hardware, leaving customers to either continue with ESXi 8.0 after its support ends or operate unsupported code.
Alternatively, customers can migrate away from HyperFlex, with Cisco providing a white paper outlining migration options, including repurposing HyperFlex hardware as standard UCS servers.
Customers have until March 12, 2024, to place orders for HyperFlex hardware and software, with Cisco aiming to fulfill these orders by June 10, 2024.
However, Cisco’s FAQ on the discontinuation notes that HyperFlex licenses cannot be converted into credit for Nutanix products, though the two companies are developing various migration offers.
Primary reason for discontinuation:
- Hyperflex was discontinued primarily due to its lackluster sales performance.
- Market share comparison:
- VMware leads the HCI market with a 41% share.
- Nutanix holds 25% of the market.
- HPE ranks third with a 7.3% market share.
Cisco's market position:
- Cisco likely fell into the "Other" category, which accounts for 26.8% of the market.
Cisco has been content with its UCS servers occupying a niche market, particularly in the blade server segment, without significantly challenging giants like Dell, HPE, or Lenovo. HyperFlex did little to alter this dynamic and imposed the additional burden of maintaining a management software stack at a time when Cisco is transitioning most of its tools to cloud and subscription models.
Moreover, Cisco's business strategy favors scalable units with robust growth prospects. With hyperscale cloud providers threatening all server makers and hybrid cloud reducing the demand for extensive on-premises infrastructure, HyperFlex’s discontinuation appears a logical step.
Smaller or open-source HCI vendors, such as Scale Computing and Proxmox VE, have shown they can thrive long-term, often under the radar. Additionally, China boasts a vibrant market of HCI vendors, many leveraging open-source technology, catering to mid-market companies. Cisco, however, has no plans to pursue this market segment.
The decision to phase out HyperFlex may also prompt speculation about Cisco’s future involvement in the server business altogether. The Register is left pondering what this means for other niche HCI offerings from major vendors, like IBM’s SpectrumFusion. ®
