HPE's SimpliVity acquisition validates hyper-convergence, say partners
HPE today announced the acquisition of SimpliVity for $650m
Hewlett Packard Enterprise's (HPE) acquisition of SimpliVity has validated the hyper-converged market, according to channel onlookers.
HPE today announced that it has reached a definitive agreement to acquire the hyper-converged vendor for $650m in a bid to strengthen its software-defined infrastructure play.
HPE CEO Meg Whitman said: "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."
Founded in 2009, SimpliVity competes with the likes of Nutanix in the hyper-converged space and claimed in March 2015 to have a valuation of $1bn.
SimpliVity's channel sales vice president George Hope recently told CRN that the vendor was not actively seeking to grow its 50-strong UK partner ecosystem.
In a joint statement with HPE, SimpliVity CEO Doron Kempel said that SimpliVity would look to leverage HPE's partner base.
"Over the past eight years we've been on an incredible journey and joining HPE is the logical next step for SimpliVity," he said.
"HPE's broad sales reach, extensive partner channel, complementary technology and commitment to innovation will accelerate SimpliVity's journey and significantly strengthen our ability to deliver the best-in-class hybrid IT solutions our customers are looking for."
Neil Jelley, sales director at SimpliVity partner UK IT Corp, said that the acquisition will validate SimpliVity's standing in the hyper-converged market, but said it will be interesting to see what happens with SimpliVity's current vendor alliances.
SimpliVity has ‘meet-in-the-channel' relationships which sees its software available on Huawei, Cisco, Lenovo and Dell hardware.
"We'd like to think that they're going to support partners," Jelley said. "We're an HP partner - we don't do huge amounts but we can - but it's interesting that they were the only real vendor who SimpliVity didn't work with previously [as part of meet-in-the-channel].
"What it means for the long haul, particular for the other vendors, time will tell really but ultimately the interesting bit is the software bit and the hardware element is probably the least important bit.
"How it's delivered isn't really so much of an issue for us so it doesn't make any difference for our plans. The only uncertainty is which platform we'll deliver it on but it certainly seems that existing SimpliVity partners and solutions will be supported for the time being."
While the HPE press release does not directly address SimpliVity's alliances with other vendors, it does state that "there will be no immediate change" for SimpliVity partners and customers.
HPE also said SimpliVity's software will be made available on HPE's servers within 60 days of the deal closing.
VC backers realise investment
Tony Lock, analyst at Freeform Dynamics, told CRN that he was not surprised to see SimpliVity acquired given its VC-backed nature.
"Simplivity is a privately-owned venture capital company and it's the end-user case for most such organisations, so from that point of view it makes perfect sense," he said. "But they also have technology that is genuinely different in terms of how they do things - particularly in the storage end and managing data - so from that point of view I'm not surprised.
"It's certainly going to be a very interesting journey for them now to maintain those relationship [with other vendors] and of course this entire space is very dynamic anyway with many of the vendors having relationship with more than one software company, so how that pans out depends very much on what the objectives are post acquisition from both HPE and the other vendors that use the SimpliVity software."
Future acquisitions
Ian Little, head of channel at distributor Ethos Technology said that the channel should brace itself for similar takeovers in the future.
Ethos is active in the hyper-converged market and is one of Cohesity's two UK distributors.
"It's recognition of a few things," he said. "One that the hyper-converged storage and compute market is the right market because these very large vendors are gobbling up smaller vendors.
"It also shows that the newer tech is better than what the traditional vendors like HP already have, but it also shows that this hyper converged space is very crowded and there's probably too many vendors in there - so they'll be more acquisitions like this."
Bruce Hockin, director of storage solutions at Cloud Distribution, a distributor that carries two rival hyper-convergence vendors in Pivot3 and HyperGrid, also described SimpliVity's acquisition as a "validation" of the space.
"I'm a little surprised at how little it went for, but it's an absolute validation of hyper-convergence and I expect to see a lot more interest in it from the channel," he said.
Hockin predicted the move would open up space for the remaining independent players, particularly Pivot3, whose solution shares with SimpliVity the characteristic of being based on VMware.
"If you're a SimpliVity partner, are you really going to want to go head to head with an HPE Gold partner? This will open the door for other players," he said.