Recent Hewlett-Packard Enterprise (HPE) storage acquisitions will play a key role in “reengineering” the company, CEO Meg Whitman said.
During HPE’s earnings call Wednesday night, Whitman called out hyper-converged startup SimpliVity and flash array vendor Nimble Storage among a list of “strategic acquisitions in key growth segments.”
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
“These were all the right strategic moves for HPE’s long-term success, but they were not done in a vacuum,” she said. “We’ve been reengineering our company while facing challenging market conditions, including stiff competition.”
For now, 3PAR all-flash arrays remain the highlight of HPE storage. Whitman said 3PAR all-flash revenue last quarter increased 33% year over year compared to an overall 14% decline of HPE storage sales. That tells you HPE isn’t doing a lot of business with its other storage products, and needs Nimble and SimpliVity to fill gaps.
Nimble, which sells all-flash and hybrid flash and disk arrays, also brings cloud-based predictive analytics to HPE storage. “We are seeing a rapid shift to all-flash,” Whitman said. “We’re extremely well-positioned here given our 3PAR portfolio and recent Nimble and SimpliVity acquisitions.”
All-flash and hyper-converged systems are high growth areas that still have relatively low adoption with room to grow.
“With Nimble, we now have a complete world-class flash storage portfolio from entry-level to the high end in a market growing around 17% per year,” Whitman said. “Nimble also brings a simple user experience platform based on predictive analytics that we plan to roll out across our storage portfolio.”
CFO Tim Stonesifer said HPE flash revenue is still negatively impacted by NAND shortages but he expects that to “loosen up” in the second half of 2017.
Neither SimpliVity nor Nimble products have driven much revenue yet for HPE. HPE closed its $650 million SimpliVity deal Feb. 17 and its $1.2 billion Nimble purchase closed April 17. A Nimble product was part of an HPE storage launch last week, however. HPE said it would ship Nimble Storage Secondary Flash Array SF-Series as well as a new 3PAR StoreServe all-flash array and MSA entry-level hybrid flash array.
HPE is selling SimpliVity software on ProLiant servers. Whitman said the SimpliVity product line is more integrated than Nimble but she expects the weight of HPE to increase sales of both the new product platforms. Nimble research and development will merge with the 3PAR R&D team.
The 3PAR product line came to Hewlett-Packard in a $2.35 billion 2010 deal.
As for future acquisitions, Whitman didn’t list any specific companies or technologies she would like to add but gave general guidelines for HPE deals.
“We have to buy it right,” she said of HPE’s acquisition strategy. “It has to be complementary technology that can leverage our distribution channels.”
She said HPE’s first option is to innovate organically, and it is also funding startups through its Pathfinder venture investment group. HPE helps fund storage startups Cohesity, Coho Data, Hedvig and Scality.
“I’m not looking for venture returns there,” she said. “I’m looking for companies that further our strategy of powering hybrid IT, powering the intelligent edge and the services that we can weave into our solutions.”