Nutanix buyout may be on the cards with HPE sniffing around

A GreenLake future could reportedly be more cloudy

Hewlett Packard Enterprise (HPE) may have hyperconverged infrastructure vendor Nutanix on its wishlist this holiday season as the OEM reportedly weighs an acquisition bid.

Citing people familiar with the matter, Bloomberg this week reported that HPE has been in talks on and off over the past few months to acquire the converged virtualization and storage vendor. Rumors of a takeover have been circulating around Wall Street since October when it was first reported that the company was exploring a sale.

However, since its market cap fell to $3.1 billion this summer – a development that likely spurred initial interest in an acquisition – Nutanix's financials have improved steadily. In fiscal year 2022 the company's net losses totaled $798 million.

As of its Q1 2023, Nutanix appears to have gotten the bleeding under control, managing to curb its losses and pushing the company's market cap to $6.24 billion in the process. If Nutanix can keep up this trend, the company very well could post a profit before the new year is out.

The road ahead …

So what could HPE possibly want with Nutanix? One potential destination for the company's virtualization and storage stack could be HPE's GreenLake everything-as-a-service (XaaS) platform.

As our sister site The Next Platform recently postulated, the only companies willing to drop the kind of cash necessary to buy Nutanix would likely be one of the major cloud providers – Amazon, Microsoft, or Google – which could use the company's software stack as a "quick and dirty" way to sell customers on hybrid cloud.

However, the same qualities that would make Nutanix's virtualization and storage suite attractive to cloud providers would also fit nicely into HPE's GreenLake software strategy.

Introduced in 2018, GreenLake was HPE's bid to bring cloud-style consumption-based pricing to on-prem datacenters. In 2019, HPE announced plans to bring its full portfolio under the GreenLake umbrella.

But unlike rival XaaS vendors, like Lenovo TruScale, HPE has leaned heavily on software to sell its GreenLake vision – developing a cloud-esque control plane of its own.

And over the past few years the company has regularly rolled out additional functionality – like Kubernetes, block storage, and operations management – to make buying GreenLake feel less like leasing hardware and more like a private cloud.

Despite these efforts, HPE has struggled to sell its more than 80,000 global partners on the model. Late last year, the company admitted that just 900 of its global partners had agreed to resell the platform.

As such, HPE may see Nutanix as a way to attract more customers to its XaaS platform.

Such a strategy would stand in stark contrast to that of rival Dell. Rather than integrating VMware's virtualization stack into its own Apex XaaS service, Dell spun off the virtualization giant late last year. Meanwhile, Lenovo has gone out of its way to avoid the issue of software wherever possible, preferring to partner with software vendors rather than buy or build its own private and/or hybrid cloud stack. ®