Hewlett Packard Enterprise just got a killer deal on some good intellectual property through their recent acquisition of SimpliVity. I have spoken about HPE and SimpliVity’s own Hyper-Conververged offerings extensively in the past. Though they both have their pros and cons, it is safe to say that SimpliVity’s OmniCube/OmniStack solutions are vastly superior to the HC380 lines from HPE. This acquisition only solidifies that HPE sees this too.
The reason I say it is such a good deal is because SimpliVity was valued at $1 billion yet HPE is getting them for only $650 million in cash. Hyper-coverged (HCI) is a $2.4 billion market and it is growing at around 25% a year. SimpliVity has always been in the top 3 best HCI solutions in the Gartner Magic Quadrant for HCI solutions and had great potential. Yet SimpliVity was founded 8 years ago (2009) and just sold for $650 Million when Pokemon Go made $600 Million in its first 90 days in the app store. I think SimpliVity short changed themselves a bit on this deal and are were worth a couple hundred million more then what they got from HPE.
HCI is the future of IT infrastructure because it saves companies money by combining compute, storage and networking into a single system running proprietary software on a standard server. We are now seeing all the biggest players in the industry starting to get ready for the coming wave of change towards HCI. Cisco has partnered closely with Springpath for their HyperFlex offering. DellEMC is doubling down on VxRail, VxRack, and Nutanix. Even Microsoft is dipping their foot in the water with Storage Spaces Direct with Azure Stack. I do believe that HPE needed someone like SimpliVity to survive this wave of change (and visa-versa) so overall the deal will be good for each of them. The best part is good competition brings the best out of all the other competitive solutions in the industry. I am excited to see what the next generation HCIA solution will be to come out of HPE, and I wish both sides the best of luck in the acquisition.