HPE gobbles SimpliVity for US$650m – well below recent valuations

Hyperconverged unicorn loses its horn


As predicted by The Register last September, HPE has announced it will acquire hyperconverged contender SimpliVity for US$650m in cash.

HPE's canned statement features lots of information about how the hyperconverged infrastructure (HCI) market is going like a train. There's also some spiel about how "bringing together HPE's best-in-class infrastructure, automation and cloud management software with SimpliVity's industry-leading software-defined data management platform, HPE and its partner ecosystem will deliver the industry's only 'built-for-enterprise' hyperconverged offering."

Whatever.

Of more interest is that SimpliVity has previously been valued well above $650m: when we first heard rumours of an acquisition, a figure of $3.9 billion was being tossed around.

SimpliVity scored four rounds of investment totalling $276m - the most recent raised $175m at a valuation of $1bn. That splash came in early 2015 and SimpliVity has done well since, establishing itself as the firm number two in the hyperconverged market.

But the $650m figure suggests that SimpliVity and its investors felt it could not get a better offer, now or ever.

Next, we need to consider what the purchase says about HPE's confidence in its own hyperconverged kit. Perhaps not much, seeing as it's decided to acquire SimpliVity's slightly odd OmniStack architecture, which relies on an Accelerator Card to do a lot of the heavy lifting for SimpliVity's data services. HPE uses a similar approach in its 3Par storage, so there's some kinship here. But rivals already point out that SimpliVity's approach represents complexity not found in competing "just throw more Xeons at it" rigs.

We also get to ponder the future of HPE's current CS 200 hyperconverged range: will the big green rectangle kill it or run it in parallel with SimpliVity and over time create a single stack? And if HPE does run two hyperconverged lines, what of it telling VMware it didn't have the bandwidth to sell the CS200 and EVO:RAIL?

As these matters become clearer, The Register will be here to let you know what's going on. ®

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