Smaller players in the burgeoning hyper-converged infrastructure (HCI) market are beating out the traditional information technology leaders, according to new report from Forrester Research Inc., providing fuel for possible initial public offerings by at least two of the upstarts.

The research firm has identified Nutanix Inc., SimpliVity Corp. and Pivot3 as leaders in the market. The report, The Forrester Wave: Hyperconverged Infrastructure (HCI), looks at 12 providers in the HCI space, ranging from large legacy vendors like Cisco Systems Inc., Hewlett-Packard Enterprise Co. (HPE), and EMC Corp. to those smaller fry.

For the uninitiated, Forrester describes HCI this way: “The next wave of integrated systems, beyond the base level of converged hardware integration, is hyper-convergence, which installs a software-defined storage layer optimized for VM-aware operation on top of an integrated hardware and system software stack.” But essentially it’s a way to simplify the management of data center hardware and software.

Forrester’s Wave is a visualization of the state of the market, similar to Gartner Inc.’s better-known Magic Quadrants. Market players are divided into four categories – Leaders, Strong Performers, Contenders and Challengers – ranked according to the strength of their product offerings and overall strategy.

Pivot3 earns its place in the “Leaders” category due in part to its longevity, having been a player in the market even before Nutanix or SimpliVity were founded, Forrester noted. The company currently boasts over 1,600 customers and is at the core of one of the two largest hyper-converged data storage clusters.

“Because it has not focused on general enterprise environments, it’s been flying under the radar for some time,” Forrester noted in its report. “In the past 18 months, the company has made a concerted effort to sell outside of its historical strongholds, and in its most recent quarter, it reported that, for the first time, non-surveillance applications accounted for the majority of its sales.”

Nutanix was cited as a “Leader” due to its ease of use, simplified management and nondisruptive capacity. Forrester also noted that Nutanix was able to boast about having some of the largest managed clusters, some of which contain more than 100 nodes. Additionally, Nutanix’s $200 million revenues makes it the largest HCI provider in terms of revenue.

As for SimpliVity, Forrester noted that although its solution is limited to 24 nodes, it offers strong multisite capability with a total raw capacity in linked clusters of around 1.3 petabyes. In an interview with theCUBE, owned by the same company as SiliconANGLE, SimpliVity Chief Executive Doron Kempel, said the reason the smaller companies have vaulted into the lead is their relative nimbleness.

Of these three leaders, it has been widely reported that both Nutanix and Pivot3 are eyeing possible initial public offerings of stock. Nutanix had shelved its IPO plans after getting a $75 million loan from Goldman Sachs in late May, but it’s now said to be aiming for an IPO as early as next month. Pivot3 last week hired a new chief financial officer, sometimes a prelude to an IPO.

Forrester says it categorized vendors in the third quarter of 2016 based on product availability, vendor meetings, reference customer evaluations and a demonstration of the solutions. In addition, vendors and their solutions must have “drawn significant interest from Forrester clients” in order to be considered.

Overall the HCI market is shaping up to be quite a crowded one, with a clutch of well-known vendors coming up close behind the leaders. Among the “Strong Performers” were familiar names like Cisco, HPE and EMC, as well as VMware Inc., Huawei Technologies Co. Ltd., Atlantis Computing Inc., Stratoscale Ltd. and Gridstore Inc.

Nutanix Chairman and Chief Executive Dheeraj Pandey talked about IPO considerations with theCUBE, at the Nutanix .NEXT conference in June*:

(* Disclosure: TheCUBE was the paid media partner for the .NEXT event. Neither Nutanix nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)

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