HPE Buys Hyper-Convergence Company SimpliVity for $650 Million

HPE has announced that it will pay $650 million for SimpliVity, a hyper-convergence company. Hyper-converged infrastructure (HCI) combines compute, storage and hypervisor into one box. HPE, which sells servers and storage, is a natural fit for the market, but its early attempts failed to make a dent.

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“It’s a prerequisite for HPE to have a good hyper-converged product,” said Arun Taneja, consulting analyst for Taneja Group Inc. “The game is on, and HPE was not in the game. This makes HPE relevant again in the overall IT infrastructure game. It puts them back in the storage game. That missing piece was too important.”

SimpliVity’s data reduction features attracted HPE, which lacked them in its HC 380 and HC 250 platforms built on StoreVirtual software and ProLiant servers. Paul Miller, vice president of marketing for HPE’s software-defined and cloud group, said he expects the deal to close within 30 days. HPE plans to sell SimpliVity OmniStack software and its hardware accelerator in ProLiant DL380 servers by mid-April.

The roadmap for late 2017 includes ProLiant servers with the HC 380 interface and SimplilVity software, with a merger of the SimpliVity and HC 380 products by the end of the year. SimpliVity OmniStack software and OmniCube appliances also feature virtual-machine-centric backup and WAN-optimized replication for disaster recovery.

SimpliVity claims around 6,000 customers have purchased its OmniCube appliance or OmniStack software running on servers from Dell EMC, Cisco, Lenovo or Huawei. “We’ll do our best to support them, but we plan to migrate them to ProLiants servers,” Miller said of current SimpliVity customers.

Miller said HPE focused on usability from the start with HCI, whereas SimpliVity went for enterprise data services. “Where we were limited was our roadmap around storage features, like dedupe and compression,” he said. “SimpliVity was the leader in that space, bar none. They architected their software-defined storage with enterprise data management services in place. Built-in backup and recovery comes with their product. We want to go into the enterprise, and we’re putting together a best-of-breed product with enterprise data management services, scale and performance.”

Miller said HPE had data reduction on its roadmap, but buying SimpliVity delivers it faster. HPE will eventually eliminate the OmniCube’s hardware accelerator and do all the data reduction in software. “It’s a cost burden” to add a hardware card, he said. “We can engineer that out.”

Most SimpliVity customers use VMware hypervisors, although OmniStack also supports Microsoft Hyper-V. Miller said HPE also had Hyper-V support on its roadmap, but only supported VMware in its HCI appliances.

Miller would not say how many of SimpliVity’s 750 employees would be offered jobs at HPE, but he said HPE’s “intent is to maintain engineering teams and everybody we need to support the product.” He would not discuss whether CEO and founder Doron Kempel and SimpliVity executives would join HPE.

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