HPE Inks Deal For SimpliVity

Hewlett-Packard Enterprise on Tuesday announced an agreement to buy hyperconverged startup SimpliVity for $650 million in cash to bolster its hybrid IT strategy.

Founded in 2009, SimpliVity was an early player in the fast-growing hyperconverged infrastructure market. The startup came out of stealth in 2012 with its OmniStack platform that combines compute, storage services, and network switching. The platform, which is composed of SimpliVity's Data Virtualization Platform software and purpose-built Accelerator Card, includes data compression, deduplication, and built-in backup.

Gartner labeled SimpliVity a leader in hyperconvergence, along with Cisco, EMC, Nutanix, and NetApp, in its Magic Quadrant for Integrated Systems last fall. In addition to offering an OmniCube appliance, SimpliVity teams with Cisco, Dell, Huawei, and Lenovo to integrate OmniStack into their servers.

“This transaction expands HPE’s software-defined capability and fits squarely within our strategy to make hybrid IT simple for customers,” Meg Whitman, HPE president and CEO, said in a statement.

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HPE said it will continue to offer its own hyperconverged products, the HC 380 and HC 250, for existing customers and partners. The company jumped into the hyperconvergence nearly a year ago with the HC 380. SimpliVity customers and partners shouldn't expect any immediate changes in product roadmap, according to HPE, which said it will continue to support them.

Within 60 days of the deal closing -- which HPE expects in the second quarter of its fiscal year 2017 -- the company plans to offer SimpliVity's software qualified for its ProLiant DL380 servers. By the second half, it expects to offer a range of integrated HPE SimpliVity systems on ProLiant servers.

Dan Conde, an analyst at Enterprise Strategy Group and Interop ITX Review Board member, told me in an email that SimpliVity provides HPE with better differentiation in the hyperconverged infrastructure market. HPE's own products aren't built from the ground-up for hyperconvergence to the same extent as SimpliVity's, he said.

"I think they [HPE] wanted some 'secret sauce'," Conde said.

Technology Business Research recently estimated that the market for hyperconverged platforms will reach $7.2 billion by 2020.

SimpliVity's OmniCube made its way to Hollywood last year, when it was disguised as the Pied Piper box in HBO's "Silicon Valley" television show.