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HPE storage more Nimble after $1.2 billion buy

HPE storage sales received a boost last quarter from its $1.2 bilion Nimble Storage acquisition.

HPE did not break out its total storage revenue by product, or even give a total amount except to say HPE storage revenue grew 11% over last year on the strength of the Nimble systems. But HPE had no revenue from Nimble last year, so the comparison isn’t exactly fair. It’s unlikely that HPE storage grew organically compared to its 2016 portfolio. Revenue from 3PAR arrays – its top selling storage platform — declined nine percent year-over-year. HPE CEO Meg Whitman attributed the decline to “a more competitive market in the U.S.”

HPE’s all-flash revenue grew 30% year-over-year, again benefiting from Nimble flash arrays that were not part of HPE a year ago. All-flash revenue increased six percent organically over HPE’s 2016 platforms, a modest gain compared to competitors’ year-over-year all-flash increases.

Nimble at least gives HPE storage prospects a reason for optimism. Whitman said Nimble Storage exceeded revenue and profit plans for the quarter. She pointed to Nimble and 3PAR as a one-two HPE storage punch that the vendor has lacked. Nimble mostly sells into midrange shops while 3PAR meets the high-end of the midrange and low end of the enterprise. 3PAR has been the vendor’s flagship storage platform since its $2.35 billion acquisition in 2010.

“We are excited now about our storage portfolio,” Whitman said. “3PAR plus Nimble, we get incremental scale, we get InfoSight, which is AI for the datacenter, and I think one plus one here is going to equal more than two. We’re really pleased.”

Whitman teased HPE’s plans to extend Nimble’s predictive analytics across the storage portfolio.

“We are incorporating Nimble’s InfoSight predictive analytics technology that uses machine learning to predict and resolve performance issues across our storage portfolio,” she said as an example of how HPE is embracing artificial intelligence.

Whitman plans to collapse the HPE storage platforms. She said HPE will combine the Nimble and 3PAR research and development teams as well as sales teams. The goal is to go after customers moving to flash storage.

“The all-flash segment in the market is growing,” she said. “And you will recall that only about 10 percent of datacenters have moved to all-flash. So there is a lot of running room there and we are a leader in that marketplace and we aim to continue that trend.”

Whitman said HPE is also starting to see results of its $650 million acquisition of hyper-converged pioneer Simplivity in January. She hyper-converged infrastructure revenue tripled over 2016, although admittedly HPE’s HCI revenue was “a small base” a year ago.

“Hyper-converged is core to our strategy of making hybrid IT simple for our customers,” Whitman said. “Simplivity has made a difference.”

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