The data management platform firm, Simplivity, has been acquired by Hewlett Packard Enterprise Co (NYSE:HPE) for $650 million. Simplivity makes hyperconverged infrastructure which is basically computer storage and servers combined with networking. This makes the managing and reprogramming of hardware possible since users don’t have to spend money on new hardware when requirements change.
The chief executive officer of HPE, Meg Whitman, said the cash deal would lead to more benefits for the enterprise IT leader’s customers as it would save them money when networking, storage and computing were combined into one system.
“This transaction expands HPE’s software-defined capability and fits squarely within our strategy to make Hybrid IT simple for customers,” said Whitman.
Market leader
In 2016, the estimated worth of the hyperconverged hardware market was $2.4 billion. By 2020 the estimated worth of this market is expected to be $6 billion considering that the projected compound annual growth rate is 25 percent. HPE, which parted ways with the printer and personal computer unit HP Inc (NYSE:HPQ) in late 2015, is hoping the deal will give it a strong market leadership position.
Simplivity was started in 2009 and is based in Hopkinton, Massachusetts. Six years after the founding, the startup put its valuation at $1 billion and it managed to raise around $276 million in funding. Accel Partners, Charles River Ventures, Meritech and Kleiner Perkins Caufield & Byers were some of its venture backers.
Hardware partners
The firm’s flagship product is the OmniCube and its sales are expected to be boosted by the tech giant. Some of the hardware companies that Simplivity has worked in the deployment of its software include Dell, Lenovo and Huawei.
The acquisition of the startup by HPE did not come as a surprise as rumors had already surfaced months ago. At the time, it was claimed that HPE would pay as much as $3.9 billion for the startup.
One of Simplivity’s competitors in the hyperconverged infrastructure segment is Nutanix Inc (NASDAQ:NTNX) which went public a few months ago.
In Tuesday’s trading, Hewlett Packard Enterprise Co fell by 1.09 percent to close the day at $22.69 a share.
