back to article HPE gobbles SimpliVity for US$650m – well below recent valuations

As predicted by The Register last September, HPE has announced it will acquire hyperconverged contender SimpliVity for US$650m in cash. HPE's canned statement features lots of information about how the hyperconverged infrastructure (HCI) market is going like a train. There's also some spiel about how "bringing together HPE's …

  1. EveryTime

    Unicorn Valuation

    It's a good example of the reality behind most of the 'Unicorns'.

    Investors structure the deals with marketing as the primary motivation. They might invest $10M for 1% of the company shares and warrants to buy 10% more at a bargain price. They publicly only disclose the $10M for 1%, which gives the magic $1B valuation.

  2. Anonymous Coward
    Anonymous Coward

    Buy Simplivity now? Really?

    Working at an HCI competitor this is kind of funny to watch.

    Buy Simplivity now? Really?

    Now that Simplivity was admittedly struggling out there, running out of money, sales, or momentum... is when HP decides to buy them.

    Thank god they didn't go deep in their pockets to buy something better. Simplivity inside HP may breath a little longer... but not much more.

    These PCI accelerator thing... with Flash evolving the way it is on SSD/NVMe ... is a completely flawed architectural option. Soon HCI vendors will support NVMe besides All Flash (SSD based) so HPE's lack of vision in buying this... I mean it feels like Autonomy all over again - but at least much cheaper!

    1. Anonymous Coward
      Anonymous Coward

      Re: Buy Simplivity now? Really?

      Huh? Compression, de-dupe and many other data management tasks are as much CPU operations as they are IO operations - how does faster SSD and NVMe help with that? I actually quite like the idea that the CPUs I have to pay expensive VM tax on can be used for VMs, not just for storage management tasks... the Simplivity model looks pretty good in that space... and when the CPUs get fast enough that this overhead becomes insignificant, well those algos will run on a general purpose processor just as well as on a custom ASIC... it's just a port... much in the same way HPE currently run all their 3Par code on custom ASICs but have already indicated at some point that functionality will be available as a virtual appliance.

      1. Anonymous Coward
        Anonymous Coward

        Re: Buy Simplivity now? Really?

        And so your point is what?

        That buying processing power in a proprietary PCI card is way better and cheaper option that beefing up you x86 CPUs?

        Or is your point that the right thing to do/expect is that at some moment in time SimpliVity may change it's architecture, dropping the major flaw I argued about... again the PCI card?

        Please help me understand what did I miss...

        1. Anonymous Coward
          Anonymous Coward

          Re: Buy Simplivity now? Really?

          FPGA's & ASICs

          http://www.theregister.co.uk/2016/03/14/intel_xeon_fpga/

          https://www.nextplatform.com/2017/01/16/fpga-frontiers-new-applications-reconfigurable-computing/

      2. Anonymous Coward
        Anonymous Coward

        Re: Buy Simplivity now? Really?

        Except their ASIC card is dreadfully slow. They have also stated they wont make a new one and are waiting for next gen Intel CPU that has built in acceleration for this.. except this has now been delayed and then delayed again. Will be a long wait for current customers.

        1. Anonymous Coward
          Anonymous Coward

          Re: Buy Simplivity now? Really?

          Given the need in HCI environments to replicate writes to a minimum of a second node I find it hard to believe the accelerator would add significant latency to the system. If anything it's going to have an NVRAM interface so the penalty will be minimal in comparison to the network hop required to confirm a write between nodes.

          The benefit I would have thought for Simplivity customers is they get to use more of their CPU for processes other than data reduction which is a very real tax on today's CPU's. Just look where the bottleneck sits on pretty much every AFA on the market (CPU) and they arguably have much lower overheads than HCI systems.

          1. Nate Amsden Silver badge

            Re: Buy Simplivity now? Really?

            Haven't used any HCI myself but the cpu overhead for storage just seems insane, have heard or read some systems want 4 cores per node to do that shit. Having an ASIC sounds great on paper though as another poster said perhaps it is slow I don't know of course never used it. My latest boxes already use 2x22 core xeons, wouldn't want to give up 4 cores from even those.

            Beefing up the Xeons is difficult because well of course they have to wait for intel to do that.

        2. Anonymous Coward
          Anonymous Coward

          Re: Buy Simplivity now? Really?

          "waiting for next gen Intel CPU that has built in acceleration for this.. except this has now been delayed and then delayed again."

          I think the acquirer may have already thought this through.

          HPE will have much much earlier access to the latest Intel CPU's than your average OEM as well as a guaranteed long term supply chain. That alongside unfettered access to Intel software engineering and the tooling to get the most out of the latest and greatest.

          In the mean time they have a proven, supported and purpose built solution that obviously adds value, otherwise it just wouldn't exist and definitely wouldn't be such a bugbear for Simplivity's competition :-)

    2. Naselus

      Re: Buy Simplivity now? Really?

      "Now that Simplivity was admittedly struggling out there, running out of money, sales, or momentum... is when HP decides to buy them."

      As opposed to when they were doing well independently and could demand a $4 billion purchase price for the same tech, you mean?

      Yeah, what were HP thinking?

  3. Anonymous Coward
    Anonymous Coward

    HP VSA had lots of issues during our testing. The only product we tested out there with more issues was Simplivity. Bugs and downtime galore during POC so dont go in blind thinking its all magic and unicorns.

    1. Anonymous Coward
      Anonymous Coward

      Sorry but HP VSA has been out there for a long time doing HCI before HCI was a thing, appreciate it's not the fashionable choice among all the startups (not built from the ground up malarky). But suggesting it or even Simplivity are bug ridden is just patently untrue.

      The same could easily be said (anonymously) for any product (pick your vendor) on the market but it doesn't make the suggestion anything other than FUD.

  4. Anonymous Coward
    Anonymous Coward

    is this then end of Store Virtual

    Its a shame, HP have a small number of very loyal customers who have invested heavily in the StoreVirtual OS whom I imagine woke up this morning questioning the validity of their choice.

    HP now have a proven track record in successfully breaking up their organisation it will be interesting to see if they still have the ability to integrate a new one..

    That being said if the Hyper Converged market needed any further validation of it's existence; HP getting to the game is clearly that if not somewhat late to the party..

    AC because I used to work at HP and now work for the market leading (by far) HCI organisation :-)

    1. Anonymous Coward
      Anonymous Coward

      Re: is this then end of Store Virtual

      Granted Simplivity may well replace SV in the HCI stack longer term, but keep in mind StoreVirtual does much more than just HCI, look at the new SV3200 for validation.

  5. Anonymous Coward
    Anonymous Coward

    Not the right price

    Simplivity is really struggling at the moment. Could have waited a few more months and get it under 100 Mil

    1. Nate Amsden Silver badge

      Re: Not the right price

      Or risk losing out to someone like lenovo or maybe HDS by doing so. Who knows maybe someone else will make a bigger bid. Back when 3par was bought Dell thougt it was good my rep came to tell me they were going to Dell and bam, next day or so HP comes out with hostile bids.

    2. Pascal Monett Silver badge
      Coat

      Ah, but the corporate heart has reasons that Reason cannot fathom.

  6. Anonymous Coward
    Anonymous Coward

    HPE overpaid

    Although Simplivity did a good job deduping $3.9B down to $650M, HPE could have waited a Q to save another $100M+. Not seeing this as a good acquisition.....the market will continue to be dominated by Nutanix, VxRail, VSAN, and AWS.

    1. Anonymous Coward
      Anonymous Coward

      Re: HPE overpaid

      It does leave Nutanix out in the cold somewhat. Stuck between a rock and a hard place, over valued and under loved with a shrinking go to market and ex partners / now frienemies circling all around, I wish them luck.

      Interesting times.

  7. Anonymous Coward
    Anonymous Coward

    On prem - pffffftttttt

    I don't care what HCI is used when I move my workloads to the cloud....

  8. Sandtitz Silver badge
    Unhappy

    Wow!

    Most posts (already) are by ACs attacking/defending HPE and Simplivity.

    There are plenty of workers from different storage vendors in these forums posting with their own name and identifying themselves and their employer. That's way more believable rhetoric than the AC FUD slinging.

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