Jeff Kato, Senior Analyst & Consultant
HPE may have just pulled a rabbit out of the hat with the purchase of SimpliVity for a mere $650M. I have been following both companies in the HyperConverged market, and this acquisition is a perfect complement for both companies. HPE has been very strong in infrastructure orchestration through the HPE OneView platform and recently has made a big push in multi-tenant self-service IaaS with it Hyper Converged Operating Environment that relies on the OneView platform. Where HPE HyperConverged has been lacking is that its StoreVirtual data services layer of its HC products has lagged behind the purpose-built storage services for HyperConvergence. HPE StoreVirtual focused on general purpose scale-out block storage whereas the leading HC vendors focus on VM-centricity where the underlying services (backup, snapshots, replication, deduplication and compression) align at the per-VM level and where administrators do not need to be storage experts.
HyperConverged pioneer, SimpliVity, on the other hand, has invested heavily in the underlying data services layer with its OmniStack Data Virtualization Platform (DVP). OmniStack DVP has a rich set of services including in-line deduplication and compression that is a “must have” for all-flash deployments. Always-on deduplication and compression at ingest means that all the other services are implemented with minimal resource impact. Services such as WAN-optimized replication and instantaneous space-efficient snapshots enable advanced data protection and resilience capabilities that are unmatched by other vendors. SimpliVity has not focused on the orchestration layer of the HyperConverged management stack which makes the merger with HPE such a great match. HPE with its broad ecosystem of partners and rich orchestration integration capability will enable OmniStack technology to expand to a broad a set of workloads and virtualization environments. OpenStack, Containers and Hyper-V environments are all now fully in play for SimpliVity which initially focused on VMware environments. HPE will also provide a global market reach that was not previously available to SimpliVity before.
With the HyperConverged market ($2.4B in 2016) growing extremely fast, the ability to expand SimpliVity technology globally makes the purchase of SimpliVity at $650M a bargain considering SimpliVity was valued at $1B about 18 months ago. The investors must have understood that only way to unleash the SimpliVity potential was to join with HPE now versus the risk of waiting to see if it could grow as fast organically and take a chance on an IPO in uncertain markets. This acquisition is a great choice for HPE and SimpliVity alike, and customers will see the benefits of the match sooner rather than later.
HPE can now once again compete across the board against Dell and Dell EMC.