HPE Acquires Simplivity – A $650 Million Data Virtualization Play

Today, HPE paid $650 to acquire Simplivity. HPE paid this sizeable amount mainly to acquire OmniStack, Simplivity’s data virtualization software platform. OmniStack’s central value proposition is OPEX reduction through the elimination of traditional infrastructure management tasks. In short, Simplivity enables customers to manage their infrastructure at the virtual machine (VM) – level. Please note that there will be a separate EMA Impact Brief covering this topic in much more detail.

Strategic Analysis Today, HPE already offers its HPE HyperConverged Operating Environment 2.0 and numerous Hyper Converged hardware solutions. In addition, HPE just launched its “composable infrastructure” offering.

Then why spent $650m on Simplivity’s data virtualization layer technology? Because HPE’s converged products and composable infrastructure offering still include too many “moving parts” that have to be managed (WAN acceleration, hypervisor, file storage, block storage, data protection, cloud gateway, deduping and SSD and spinning disk arrays). This still provides more than enough ammunition for CFOs to raise an eyebrow and demand the move to Amazon Web Services or Microsoft Azure. And that exactly is why Simplivity was worth the $650m. Each workload moving to the public cloud is unlikely to ever return to HPE hardware or management tools. So by arming enterprise IT with a strong OPEX argument against AWS and Azure, OmniStack will be the dam that prevents even more application workloads from moving out of the data center for good.

Highlights of the IP that Cost $650m • All operations management happens centrally and at the VM-level.