HPE Acquires SimpliVity in Hyperconverged Push

Posted on January 18, 2017 By Pedro Hernandez

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Hewlett Packard Enterprise (HPE) is acquiring hyperconverged infrastructure provider SimpliVity for $650 million, the IT giant announced on Jan. 17.

"This transaction expands HPE's software-defined capability and fits squarely within our strategy to make Hybrid IT simple for customers," said Meg Whitman, President and CEO of HPE. "More and more customers are looking for solutions that bring them secure, highly resilient, on-premises infrastructure at cloud economics."

SimpliVity emerged from stealth in the summer of 2012. The Westborough, Mass.-based data storage company specializes in hyperconverged systems for virtualized environments. The firm's systems, dubbed OmniCube, pack compute and storage -- HDD and SSD storage or SSD-only in the CN-5400-F model -- into a 2U appliance that provides hypervisor, backup, replication, deduplication and cloud gateway functionality with WAN (wide-area network) optimization. Although SimpliVity got its start supporting VMware environment, the company now supports Microsoft's Hyper-V virtualization technology within Windows Server 2016.

According to HPE, the market for hyperconverged solutions hit an estimated $2.4 billion last year and will reach nearly $6 billion by 2020. In an online Q&A, Antonio Neri, executive vice president and general manager of HPE's Enterprise Group, said his company is snapping up SimpliVity to better position itself in this expanding market and "to deliver the industry's only 'built-for-enterprise' hyperconverged offering."

Naturally, this increasingly competitive market is teaming with rivals, including Dell, Nutanix, Scale Computing and HPE itself.

Jeff Ready, CEO of Scale Computing, told InfoStor the acquisition was "further proof the HCI [hyperconverged infrastructure] space is here to stay." But the deal also raises some concerns.

"They are dependent on VMware, which means for every $1 of HCI they sell, 50 cents goes into Dell's pocket," added Ready, referencing Dell's ownership of EMC and its majority stake in VMware. Additionally, SimpliVity's storage optimization strategy may not align well with the storage technology landscape in the near future, he argued.

"HPE is big on the deduplication tech that Simplivity had, and it was good technology. It’s married to a hardware card that goes on each server, so there's some limited flexibility there. But moreover, this is the worst time in history to be investing in deduplication," said Ready.

"The next gen of storage hardware with 3DxPoint, etc., is about to bring us things like 32TB flash drives," Ready continued. "Why dedupe a small drive when massive capacity increases are upon us?"

In the short term, it will be business as usual for both HPE's and SimpliVity's hyperconverged portfolios. HPE plans "to offer the SimpliVity Omni Stack software qualified for its ProLiant DL380 servers" within 60 days of the deal's closing, said Neri. The companies expect to complete the transaction in the second quarter (Q2) of fiscal year 2017 for HPE, or by April 30.

"In the second half of 2017, the company will offer a range of integrated HPE SimpliVity hyperconverged systems based on HPE ProLiant Servers," he added.

Pedro Hernandez is a contributing editor at InfoStor. Follow him on Twitter @ecoINSITE.


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