Hewlett Packard Enterprise has made a major acquisition to strengthen its presence in what it terms the entry and mid-range segments of the flash market. HPE has entered into a definitive agreement to acquire San Jose-based Nimble Storage. The price, $12.50 per share in cash, represents a total of $1.0 billion. In addition to the purchase price, HPE will also assume Nimble’s unvested equity debt, which is approximately $200 million. The plan is for Nimble to merge with a subsidiary of HPE and become a wholly owned subsidiary of HPE, after which Nimble shares will be delisted from the New York Stock Exchange. The deal is expected to be completed in April.
“Nimble Storage’s portfolio complements and strengthens our current 3PAR products in the high-growth flash storage market and will help us deliver on our vision of making Hybrid IT simple for our customers,” said Meg Whitman, HPE’s President and CEO, in a statement. “And, this acquisition is exactly aligned with the strategy and capital allocation approach we’ve laid out. We remain focused on high-growth and higher-margin segments of the market.”
“We believe the Nimble value proposition is the most compelling for HPE customers when compared with other recent market entrants, and in combination with 3PAR, can provide the best lineup in the industry of flash optimized solutions for hybrid IT,” said Antonio Neri, Executive Vice President and General Manager of HPE’s Enterprise Group.
In HPE’s strategy going forward, the Nimble portfolio will sit in the mid-range, forestalling the need to continue to try and bring 3PAR technology further downmarket. It will sit above HPE’s MSA line, which handles the entry-level and cost-conscious segments, simple, offering flash tiering support at an entry price point.
“Nimble is ideal for customers needing advanced, flash-optimized data services, including all-flash, hybrid-flash, and multicloud support, underpinned by machine-learning based predictive analytics, all at entry to midrange price points and designed with ease of use at its core,” Neri said. “Built-for-enterprise, hyperconverged infrastructure: Nimble also complements our recent SimpliVity acquisition for the growing hyperconverged market for those deploying turnkey VM-farms with advanced data services. The combination of SimpliVity, Nimble, and 3PAR enables customers to deploy the right data services across all workloads and deployment types.”
“Much like 3PAR started high and then addressed the needs of customers pushing down market, our interest in Nimble started with an acknowledgement that the flash market is rapidly evolving and those same needs are moving even lower,” said Bill Philbin, Senior Vice President and General Manager, Storage and Big Data, HPE. “Entry and midrange customers are demanding the same flash-optimized data services that their Enterprise counterparts have enjoyed for several years. However in this space there is also a need for incredibly straightforward and simple deployment and an expectation for support experience driven by the consumer interactions we all take for granted on our smart phones and devices.”
Nimble’s InfoSight Predictive Analytics platform is itself a major asset in the acquisition, which HPE says is critical to its entire storage roadmap.
“A key element of that roadmap is Nimble’s predictive analytics platform,” Neri said. “InfoSight’s ability to monitor customer deployed infrastructure from the cloud, apply machine learning and predictive analytics to radically simplify operations and deliver a transformed support experience is a key differentiator in the storage market. HPE will leverage InfoSight across our portfolio of storage products, further enhancing our competitiveness against large and small competitors.”
Gathering literally tens of millions of data points each day, InfoSight automatically detects 90 percent of all issues within a customer’s infrastructure, and resolves over 85 percent of them, significantly reducing the amount of time and effort a customer’s IT team spends on support activities.
“We can’t wait to leverage that engine and bring it to 3PAR and other pieces of the HPE portfolio,” Philbin said.
Another Nimble Storage element HPE plans to leverage is the brand new Nimble Cloud Volumes, an enterprise-class multi-cloud storage service that runs applications in Amazon Web Services and Microsoft Azure. It is currently in beta. Nimble Cloud Volumes extends Nimble technology beyond on-prem, the product of 18 months of development. It allows the technology to be delivered as an end-to-end service, making all Nimble products cloud-ready – even arrays purchased years ago.
“Nimble Cloud Volumes provides block storage services for Compute from AWS and Azure that is as easy to use as public cloud storage – but with far superior resiliency and more advanced data services including hybrid cloud data mobility to prevent lock-in,” Philbin said. “The NCV approach also handily eliminates the cost associated with public cloud repatriation of data and opaque SLAs, which are two of the largest issues customers have expressed around storage in the public cloud.”
HPE’s Nimble acquisition also throws a monkey wrench into Lenovo’s strategy. Last October, Lenovo and Nimble announced the launch of a new strategic partnership, to collaborate to develop a family of appliances designed to simplify the data centre. The Nimble partnership is one element of a new portfolio Lenovo had badged as ThinkAgile, and which in North America also included their HX hyperconverged appliances with Nutanix. ThinkAgile appears to have had its agility crippled by HPE’s move here.
Lenovo was, however, quick to respond to the bad news. Their Data Center Group issued a statement, stressing that as change is continuous in this industry, their strategy and operations are highly agile and can adapt quickly to any market developments.
“Lenovo announced the alliance with Nimble in October 2016 and the relationship was in its early stages,” the statement reads. “As such, there is virtually no impact on either our customers or product portfolio. Going forward, we will expand our efforts to bring the compelling benefits of flash-based storage to our customers, both in traditional data center infrastructure and next-generation IT solutions. In fact, we plan to introduce new flash storage offerings later this year.”
Nimble was founded in 2007 and has approximately 1,300 employees worldwide. The company delivered revenue of $402 million in its most recent fiscal year, up 25 percent year over year.