Microsoft HCI partnership with Intel aimed at Dell, Nutanix

Microsoft has roped Intel as its latest distribution partner for its on-premises iteration of Azure-based hyper-converged infrastructure, or HCI.

The two market-moving vendors on Tuesday unveiled Intel Data Center Blocks (DCB) for Microsoft Azure Stack HCI, based on Microsoft's Hyper-V virtualization. Azure Stack HCI is a variant of the Microsoft Azure public cloud software. The Intel-certified systems are similar in design to Azure Stack HCI offerings validated by Dell Technologies and Lenovo.

Microsoft Azure Stack HCI is used mostly by Windows shops that run virtual machines in the Azure cloud. Intel DCB provides validated L9 server building blocks that systems integrators configure and tune to specific workloads. Intel said it will handle bare-metal certification of resellers and maintain all hardware, with Microsoft responding to service issues with Azure.

The Intel partnership allows customers to manage the Azure public cloud service as a locally hosted deployment, said Bob Laliberte, a senior analyst of networking and converged infrastructure at Enterprise Strategy Group, a division of TechTarget. He said customer interest in HCI is increasing as organizations look to deploy cloudlike architecture that is locally managed.

"I commonly refer to HCI as hybrid cloud infrastructure, as it is rapidly becoming the de facto choice for on-premises infrastructure in a hybrid cloud environment," Laliberte said.

Microsoft Azure Stack provides distributed mode hybrid cloud computing that is hosted locally, similar to what Amazon Outposts and Google Anthos on-premises devices. That shift of IT spending to the cloud has an impact on storage vendors, who have seen revenue of external storage systems decline even prior to the pandemic. Forrester Research estimates the public SaaS market will reach $240 billion by 2022.

Forrester analyst Naveen Chhabra said Microsoft has made strides in enabling Hyper-V to run as a physical cloud instance.

"AWS is launching its own flavors of hybrid cloud services. But Microsoft is lined up very well to do it. Microsoft has a strong presence in the data center and it has a strong Azure subscription (base). Azure Stack HCI is about bridging those two worlds," Chhabra said.

Hyper-converged infrastructure systems consolidate all computing resources as a single appliance, including networking, storage and virtualization. Virtual desktop infrastructure and backup remain prevalent use cases, although customers are starting to use HCI to support native cloud services.

Microsoft supports converged and hyper-converged deployments with commodity servers and locally attached drives as part of Storage Spaces' software-defined storage. Dell Technologies and HCI pioneer Nutanix are the acknowledged market leaders in the category.

According to IT analyst firm IDC, Dell generated $520 million in HCI revenue last quarter from sales of its Dell EMC VxRail system and its VMware vSAN software-defined storage. Nutanix was second at $254 million. The Nutanix Enterprise Cloud, launched last year, is also built with validated Intel DCB configurations.

Dell controls the market with OEM deals as well, selling Nutanix XC Series and Dell EMC Integrated Systems for Microsoft Azure Stack HCI. The latter product incorporates the Azure Stack HCI OS on validated Dell PowerEdge AX server nodes. Server maker Lenovo also offers a validated Azure Stack HCI architecture with its ThinkAgile MX nodes.

Nutanix is seeking to reinvent itself as a cloud software provider. It struck an agreement last year with Microsoft that allows Nutanix HCI clusters to run in Azure.

About the author
Before joining TechTarget's news team, Garry spent more than 13 years as a freelance business and technology writer, including 10 years as a contributor to TechTarget. Garry's work has appeared on SearchNetworking, SearchSecurity, SearchMicroservices and other TechTarget sites. Prior to freelancing, he was a staff editor at Digital Business and managing editor of Richmond Ventures magazine.