Breaking: HPE Acquires HCI Startup Simplivity

Hewlett Packard Enterprise (HPE) today announced a $650 million acquisition of hyperconverged infrastructure (HCI) startup SimpliVity. The deal comes after HPE spent much of the last year streamlining its business capabilities, shedding business units that did not align with its emphasis on cloud-based infrastructure, storage and servers. 

HPE’s move to acquire SimpliVity, which consistently gained traction last year in a race for market dominance in a small but fierce field of competitors that include rival Nutanix, falls right in line with its new strategic focus. According to Gartner, the HCI market is projected to reach nearly $5 billion, or 24 percent of the market, by 2019, making it the fastest-growing segment of the overall market for integrated systems. HPE clearly wants a big piece of the software-defined infrastructure action, and this deal will help them get there. 

“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, Hewlett Packard Enterprise, in a statement. “More and more customers are looking for solutions that bring them secure, highly resilient, on-premises infrastructure at cloud economics. That’s exactly where we’re focused.”

Last year, Simplivity’s big rival Nutanix went public with a splash. SimpliVity had raised over $276 million, and at one point was one of the infamous “unicorns,” startups with a valuation of over $1 billion. Rumors circulated last year that it, too, might be considering an IPO.  

“Over the past 8 years we’ve been on an incredible journey and joining HPE is the logical next step for SimpliVity,” said Doron Kempel, Chairman and CEO, SimpliVity, in a statement. “HPE’s broad sales reach, extensive partner channel, complementary technology and commitment to innovation will accelerate SimpliVity’s journey and significantly strengthen our ability to deliver the best-in-class hybrid IT solutions our customers are looking for.”

HPE will continue to offer current  customers and partners its existing hyperconverged products, the HC 380 and the HC 250, and there will be no immediate change in the product roadmap for SImpliVity customers. The deal is expected to close in the second quarter of HPE’s 2017 fiscal year, ending on June 30, and HPE intends to offer the SimpliVity Omni Stack software qualified for its ProLiant DL380 servers within 60 days of closing. In the second half of 2017, the company will offer a range of integrated HPE SimpliVity hyperconverged systems based on HPE ProLiant Servers.