HPE Gets Nimble: Dollars, Distribution...and Differentiation

 aquisition.jpgSo, as of this week Nimble is a part of HPE. In exchange for a billion dollars (plus taking on $200M of equity awards) HPE gets the hybrid and all-flash vendor that achieved a highly-respectable $402M in sales in its last fiscal year.

 Much of the commentary has, not surprisingly, focused on where this slots into the HPE portfolio from a positioning perspective (just to tie off on that it is pretty clear that Nimble will become the low- to mid-market offering tucked next to 3PAR for the mid- to high-end). And the mantra from HPE is that this acquisition helps it become more of a hybrid IT powerhouse because Nimble extends HPE's existing abilities in the flash market; from the Nimble perspective, it of course gains the kind of marketing and distribution strengths that it could only dream of until now.

Suresh Vasudevan, the frank and engaging CEO of Nimble acknowledges that the market is very different now than it was when Nimble got its start in 2007; as he told me when we were chatting about the HPE deal (although I might be paraphrasing his way-more elegant statements just a tad!), scaling for profitability as a small- to mid-sized standalone storage vendor is tough sledding in a contemporary IT world that is increasingly consolidated-hybrid-cloudy-mega-competitive-and-behemoth-dominated.  

Now all this is true, but it misses some subtleties that are, in my opinion, actually more noteworthy. To paraphrase a well-known saying, "the devilish value is in the details." 

Nimble's abilities with flash are certainly impressive (for instance, its pragmatic and predictive Nimble Cloud Volumes are noteworthy), and they are certainly useful to HPE, but "being better at flash across more market segments" doesn't in and of itself move the needle that much for HPE...if for no other reason than the fact that flash, per se, is not really a market at all; it is a media. Don't get me wrong, if HPE’s market(ing) muscle can, say, double Nimble revenue in short order then that'd be heading toward a billion bucks and even HPE pays attention to that sort of number!

However, a much bigger mid- to long-term attraction for HPE—and it's a value that HPE's customer base will warm to as they learn more about it—is the InfoSight "predictive service, support, analytics and what-if?" support software package that Nimble has. It has generated crazy, cult-like enthusiasm from the Nimble faithful and is likely relatively easy to scale across much of the HPE portfolio. You put those capabilities in with the monitoring, measuring, and cost-optimizing that can be done with Cloud Cruiser (another recent HPE acquisition) and you genuinely start to see a way to deliver flexible, pragmatic, predictive hybrid IT...because just having a bunch of the prerequisite component "ingredients" of hybrid IT is insufficient without a range of the—also requisite—recipes, menus, and [virtual/automated] cooks.

This is an attractive-looking deal, and not just for the obvious superficial dollars and distribution, but for the longer term valuable differentiation.   

Topics: Storage Cybersecurity