Hewlett Packard Enterprise (HPE) announced that it will acquire SGI, a SIlicon Valley company that is known for its high performance solutions for compute, data analytics, and data management. HPE will pay $7.75 per share in cash and the total transaction is valued at approximately $275 million.
SGI’s FY2016 revenue was $533 million and came from high-performance computing (HPC) and big data analytics applications in the scientific, technical, business and government communities. Although HPE does not have its own public cloud, its systems are used in Private Cloud deployments. Enterprises are increasingly dealing with the explosion of data from Information Technology (IT) and Internet of Things (IoT) applications in their private cloud environments and need high performance systems to quickly and securely process massive data sets and enable real-time decision making. High-end systems are also being used to advance research in weather, genomics and life sciences, and enhance cyber defenses at organizations around the world. With this acquisition HPE can augment its capabilities in big data compute and storage. As per Antonio Neri, executive vice president and general manager, Enterprise Group, HPE:
“SGI’s innovative technologies and services, including its best-in-class big data analytics and high performance computing solutions, complement HPE’s proven data center solutions designed to create business insight and accelerate time to value for customers.”
SGI which was previously called Silicon Graphics International has historically developed high performance systems for Maya 3D graphics software used in CAD applications. With the addition of 3D graphic capabilities to x86 based servers and the ability of Linux and BSD clusters to take on many of the tasks of larger SGI servers, SGI’s position got impacted negatively. The company had standardized on MIPS architecture based systems and then transitioned to Intel Itanium scale-up architecture and eventually to scale-out x86 architecture. SGI filed bankruptcy twice and then finally got bought by Rackable Systems, another Silicon Valley company that did really well in late 1990s and early 2000s with their innovative scale-out racked and stacked systems with optimized server cooling technology.
Post acquisition by Rackable, the joint entity decided to brand the company as SGI and have carried two product lines – scale out systems from Rackable and scale-up systems from Silicon Graphics. For HPE, this can be a good move specially to address high performance needs of today’s applications. Technologies like Hadoop need large scale-out systems and HPE could use the Rackable portfolio to address large server farm and high-end enterprise application requirements. According to Jorge Titinger, CEO and president, SGI:
“The computing power that our solutions deliver can interpret this data to give customers quicker and more actionable insights. Together, HPE and SGI will offer one of the most comprehensive suites of solutions in the industry, which can be brought to market more effectively through HPE’s global reach.”
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