Hewlett Packard Enterprise’s agreement to buy hyperconverged-infrastructure provider SimpliVity for $650 million in cash, announced Monday, gives HPE one less competitor to deal with and a bigger market for its hardware.
The purchase means SimpliVity’s Omni Stack software will be put on HPE’s ProLiant DL380 servers within 60 days after closing, HPE said. Then, “in the second half of 2017, the company will offer a range of integrated HPE SimpliVity hyperconverged systems based on HPE ProLiant Servers,” HPE said in its release.
Hyperconvergence refers to integrating computing, storage, networking and virtualization within a commodity hardware box supported by a single vendor.
HPE was already a leader in hyperconvergence, which makes sense as it’s among the largest makers of servers. But it’s new to the market relative to more established hyperconvergence firms, Gartner pointed out in its 2016 Magic Quadrant for Integrated Systems report.
SimpliVity, founded in 2009 and based in Westborough, Mass., was the second-largest hyperconvergence vendor in 2016, behind Nutanix, that report said. It has 750 employees and has shipped more than 6,000 systems since 2013. SimpliVity has “a strong mid-market presence and growing acceptance in large enterprises.” The acquisition eliminates one worry Gartner cited: its somewhat precarious existence as a privately held company dependent on venture funding.
[Editor’s Note: This story originally misstated the top company in the Gartner Magic Quadrant.]
HPE, a cloud, server and storage company that split from Hewlett Packard in late 2015, laid off an undisclosed number of employees in the fall. It’s had trouble making its mark in the crowded cloud-computing arena, this summer losing Bill Hilf, the senior VP and general manager of HPE Cloud, who became CEO of Paul Allen’s Vulcan.
“Software is still a key enabler of our go-forward strategy, but we need the right assets to win in our target markets,” HPE CEO Meg Whitman said in September.