- Cisco recently announced that the joint sales of FlexPod had crossed $3 billion since its introduction four years ago.
- Among the large players in the integrated infrastructure market, EMC was third behind FlexPod.
- However EMC's growth in the segment was the highest among the leaders, which helped the storage giant gain significant share.
Leading storage provider NetApp (NASDAQ:NTAP) and networking giant Cisco (NASDAQ:CSCO) signed an agreement back in 2010 to build FlexPod, an integrated infrastructure to take on rival storage company EMC (NYSE:EMC). Integrated infrastructure is basically a hardware system that contains server hardware, disk storage system, networking equipment and systems management software all integrated into a single platform. Cisco recently announced that the joint sales of FlexPod had crossed $3 billion since its introduction four years ago. Moreover, FlexPod shipments grew by 81% year-on-year in the recent quarter, translating to $2 billion in revenues on an annual run rate basis. 
Below we take a look at the integrated infrastructure market and the presence of FlexPod, VCE (the joint venture by VMware (NYSE:VMW), EMC and Cisco) and Cisco's Unified Computing System that uses EMC's VMAX storage. We also explore the possible impact of FlexPod to refrain from supporting NSX, VMware's network virtualization platform.
FlexPod's Market Presence
According to latest figures released by IDC, FlexPod overtook VCE as the largest supplier of integrated infrastructure in the March quarter, with $270 in revenues and a 22.7% market share.  VCE lost the top spot it enjoyed in 2013 with a decline in market share despite a 44% y-o-y revenue growth to $255 million in Q1.
According to Cisco-reported figures, FlexPod was deployed with 4,100 customers in over 100 countries by the end of June this year - a 78% surge in the number of customers from 2,300 customers last year. FlexPod is poised to grow further, with the company having more than a thousand channel partners that are qualified to sell and support the platform. The company believes that the growing adoption of hybrid cloud computing should help FlexPod as Cisco's Application Centric Infrastructure (ACI) integrated with NetApp's Clustered ONTAP and Flash storage solution is likely to gain further momentum. This is bad news for virtualization giant VMware as both Cisco and NetApp have ensured that the FlexPod architecture will support the ACI technology instead of VMware's NSX technology going forward. 
NetApp's product revenues have declined in the last two quarters owing to a slowdown in its core storage business. The company intends to independently sell unbundled software from full systems to large customers, ensuring that a rise in storage software revenues contributes to overall product revenues. With Clustered ONTAP featuring heavily in the FlexPod architecture, the gaining popularity of the integrated infrastructure could help improve top line growth.
EMC-Cisco Systems: The Biggest Gainer
Among the large players in the integrated infrastructure market, EMC was third behind FlexPod and VCE in the most recent quarterly figures released by IDC. However, EMC's growth in the segment was the highest among the leaders, which helped the storage giant gain significant share from both VCE and FlexPod. EMC's integrated infrastructure revenues grew by over 100% y-o-y in the March quarter to $180 million, outpacing the industry, which grew at about 70% over the prior year quarter.  Consequently, EMC's share in the market rose to 15.2% from 12.9% in the year ago period.
Disclosure: No positions.