The SimpliVity hyper-converged product line was mature enough and the company's customer base deep enough to get...
one of its major enterprise partners to buy it in early 2017. When Hewlett Packard Enterprise shelled out $650 million for SimpliVity Corp., some saw it as a major win for HPE. SimpliVity had been valued by some at around $1 billion and was labeled as one of the top three leaders in the hyper-converged infrastructure space.
Since the purchase, HPE has continued to sell the SimpliVity OmniCube line of appliances and sell its own servers with SimpliVity's OmniStack software. However, the acquisition has yet to turn into meaningful market share for HPE. HPE ranked fourth in HCI revenue with less than 5% market share in the second quarter of 2018, according to IDC. HPE's $72 million of revenue in the quarter did represent 119% year-over-year growth.
HPE further built its HCI platform in 2018 by acquiring hyper-converged networking company Plexxi, and it has said that its HCI roadmap includes incorporating Plexxi software with SimpliVity technology.
When was SimpliVity founded, and when was it acquired?
In 2008, Doron Kempel -- who sold his former company Diligent Technologies to IBM -- launched SimpliVT Corp. The vendor changed its name to SimpliVity Corp. in late 2009. SimpliVity launched its OmniCube hyper-converged storage appliance in beta in 2012, and it became generally available in early 2013. HPE acquired SimpliVity in 2017, just days after Forrester named the startup one of the top three HCI vendors along with Pivot3 and Nutanix.
Why did SimpliVity decide to sell to HPE?
Only the people involved in the deal can truly say why, and Kempel simply said in the press release announcing the purchase that "joining HPE is the logical next step for SimpliVity." But SimpliVity had raised $276 million in venture funding, a whopping $175 million of which came in a Series D round in March 2015. Its major competitor among HCI startups, Nutanix, went public with an initial public offering in September 2016. By the time of the Forrester report in January 2018 that labeled SimpliVity among the top three HCI vendors, Nutanix had a reported 3,100 customers to SimpliVity's roughly 1,300. In addition, Kempel has a track record of selling startups. He sold Diligent Technologies to IBM for $200 million in 2008, five years after founding the backup hardware startup.
Prior to the HPE acquisition, what were the main SimpliVity hyper-converged products?
In addition to various versions of the OmniCube appliance, SimpliVity sold the OmniStack software inside the OmniCube. As of the time of the HPE acquisition, SimpliVity claimed a total of 1,300 customers that either had purchased OmniCubes or OmniStack software on servers from Cisco, Dell EMC, Lenovo or Huawei.
Did HPE have HCI products before buying SimpliVity?
HPE sold and continues to sell its ConvergedSystem line of products. Depending on the specific product, the ConvergedSystem can be a converged infrastructure platform, HCI, composable infrastructure or specifically tuned to the needs of big data and in-memory analytics applications, such as SAP HANA. In addition, HPE continues to sell ProLiant servers with the OmniStack software built in, like it did as a SimpliVity partner before the purchase.
What is OmniStack Accelerator?
From the first OmniCube product in 2013, SimpliVity incorporated a Peripheral Component Interconnect Express (PCIe) card to handle compression and inline deduplication of all the data written to or read from the OmniCube. SimpliVity cites a data reduction rate of 40-to-1 using the Accelerator card. That PCIe card is now called the HPE OmniStack Accelerator Card, but HPE said right after the SimpliVity purchase that it planned to eventually eliminate the card from OmniCube to reduce cost. The functions would all be handled in software after that.
How does the new SimpliVity 2600 fit into HPE's SimpliVity hyper-converged line?
In July, HPE announced SimpliVity 2600, a compact version of its HCI appliance. The 2600 is a 2U device, intended for running a virtual desktop infrastructure, but HPE has indicated it will market it for edge computing and IoT applications because of its relatively small footprint. The 2600 is the first new product that fulfills the HPE promise to do away with the OmniStack Accelerator Card, running all the data compression and deduplication in software alone.
Which hypervisors do the HPE SimpliVity hyper-converged products support?
The OmniCube was built to support VMware virtualization and, therefore, the vSphere ESXi hypervisor. SimpliVity later added support for the open source Kernel-based Virtual Machine hypervisor to the product line and, in 2016, added support for Microsoft's Hyper-V.