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HPE to acquire data-management platform SimpliVity for $650mn

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CIOL HPE to acquire data-management platform SimpliVity for $650M

Hewlett Packard Enterprise has announced a $650 million cash deal to acquire data-storage startup SimpliVity.

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SimpliVity was founded in 2009 and combines storage, computing and networking into a single system. This category of hardware, known as hyper-converged infrastructure, is a fast-growing segment of an otherwise declining worldwide server market.

The startup has raised almost $276 million in four funding rounds, over the last couple of years, led by the likes of Kleiner Perkins Caufield & Byers, Accel Partners, DFJ Growth, CRV and Waypoint Capital.

HPE would be using the new platform to boost its existing infrastructure, automation and cloud services. “This transaction expands HPE’s software-defined capability and fits squarely within our strategy to make Hybrid IT simple for customers. 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,” said Meg Whitman, president and CEO of Hewlett-Packard Enterprise.

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Though SimpliVity’s last funding round in March 2015 led by Switzerland-based Waypoint Capital valued the company at over $1 billion, the discounted price reflects a competitive landscape that changed quickly last year.

HPE had been in the news for offloading some of its business lately in return for cash. Last September, for example, it sold off most of its software unit in a deal worth roughly $8.8 billion. Then, in November, it also sold off its OpenStack and Cloud Foundry assets to SUSE. Looks like, the cash gained is being leveraged to gain a strong foothold in a new sector.

SimpliVity is a new beginning for HPE in the hyper-converged market that was estimated to have a value of around $2.4 billion in 2016. However, the market is expected to continue rapid growth until it reaches almost $6 billion, by 2020. HPE hopes to leverage SimpliVity’s systems in conjunction with its own software, so as to make hyper-converged infrastructure a niche of its own.

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