That was fast! HPE only announced it planned to acquire hyperconverged software vendor SimpliVity on January 17, and it closed exactly one month later, on February 17. Why the hurry? Because they need to!
You can't let a market get away from you, and hyperconverged is a fast growing market. When ESG surveyed IT managers responsible for cloud infrastructure decisions, we learned that hyperconverged systems are playing a huge role in IT's plans. When ESG surveyed IT managers responsible for cloud infrastructure, we found that 85% of them are using or plan to adopt hyperconverged solutions.
That's not to say that hyperconverged solutions take over the world. Indeed, when we asked those same people what their primary approach to IT infrastructure will be in 5 years, 57% said they still plan to deploy the traditional 3 tier (server, storage, network bought separately as best of breed technology) architectures. But still the fact that 43% are planning to or thinking about changing their approach within 5 years indicates a profound shift in how we "do" IT, given how slow things have changed over time.
HPE needed SimpliVity. It had hyperconverged solutions, the HC 250 & 380 - but these were really pretty basic "VDI vending machines" - as HPE themselves called them. SimpliVity opens up HPE to address a much broader set of use cases. I published some initial thoughts on the aquisition, along with some details on the deal, here when it was first announced. But it really comes down to this:
- As I said (and as is shown above): hyperconverged adoption is on fire.
- Dell EMC has a huge lead, owns the stack (and mostly owns VMware), and remains a marketing machine.
- That said, integrating two monstrous companies, technology, supply chains, sales forces and service offerings is not easy. They have a large converged and hyperconverged portfolio and overlap, so there may be some near term cracks in the armor that HPE can exploit.
- But (and there is always a but) strong leadership remains at the helm of the converged platform division - Chad Sakac is still the president of the group, and I never, ever underestimate the power of Chad. He brings the focus and drive the division needs to thrive in the larger Dell EMC.
- Nutanix has huge name recognition and a head start and strong channel relationships.
- But Dell EMC is a huge sales channel for them, and now Dell EMC has the old EMC VCE hyperconverged portfolio. They did renew the relationship with Dell EMC with big revenue commitments shortly before the deal closed, but we know the EMC sales force, and they are not inclined to sell other people's kit.
- However, Nutanix is pretty much hardware-agnostic. Since we expect HPE to eventually end the SimpliVity partner hardware integrations, for HPE partners and customers looking for hardware choice, Nutanix provides a good alternative. The Lenovo partnership is strong, and Nutanix is investing in partner marketing with companies like Citrix to address specific use cases. Don't expect them to slow down.
Integrating SimpliVity is nothing like the heavy lifting of bringing together Dell EMC. Now HPE owns the stack, it has strong relationships with Microsoft and VMware, a solid, enterprise-class hyperconverged platform, and a whole new data management layer it can leverage across the portfolio (see my other blog for details on that). Its converged and engineered systems were already strong - so it has the full boat of tech to take on the Dell EMC behemoth. Give them a month or two to get their ducks in a row, then let the games begin!