Hewlett Packard Enterprise on Tuesday announced a definitive agreement to acquire SimpliVity, a leading provider of software-defined, hyperconverged infrastructure, for $650 million in cash. The hyperconverged market was estimated to be approximately $2.4 billion in 2016, and is expected to grow at a compound annual growth rate of 25 percent, to nearly $6 billion, by 2020. By bringing together HPE’s best-in-class infrastructure, automation and cloud management software with SimpliVity’s industry leading software-defined data management platform, HPE and its partner ecosystem will deliver the industry’s only “built-for-enterprise” hyperconverged offering.

“This transaction expands HPE’s software-defined capability and fits squarely within our strategy to make Hybrid IT simple for customers. More and more customers are looking for solutions that bring them secure, highly resilient, on-premises infrastructure at cloud economics.  That’s exactly where we’re focused,” said Meg Whitman, President and CEO, Hewlett Packard Enterprise.

SimpliVity, which is privately held, was founded in 2009 and is headquartered in Westborough, MA. The company’s software-defined, hyperconverged infrastructure is designed from the ground up to meet the needs of enterprise customers who require on-premises technology infrastructure with enterprise-class performance, data protection, and resiliency, at cloud economics.

The combined HPE and SimpliVity portfolio will offer a rich set of enterprise data services across hyperconverged, 3PAR storage, composable infrastructure and multi-cloud offerings.

Adding SimpliVity’s innovative technology to HPE’s hyperconverged portfolio provides significant additional benefits to customers, including:

• Built-in enterprise data protection and resiliency that simplifies backup and enables customers to more quickly restore operations.   
• Enterprise storage utilization and virtual machine (VM) efficiency that helps customers control cost and performance.
• Always-on compression and de-duplication that guarantees 90 percent capacity savings across storage and backup. 
• Policy-based VM-centric management that simplifies operations and enables data mobility, making development teams and end-users more productive.

“Over the past 8 years we’ve been on an incredible journey and joining HPE is the logical next step for SimpliVity. HPE’s broad sales reach, extensive partner channel, complementary technology and commitment to innovation will accelerate SimpliVity’s journey and significantly strengthen our ability to deliver the best-in-class hybrid IT solutions our customers are looking for,” said Doron Kempel, Chairman and CEO, SimpliVity.

Software-defined infrastructure is at the heart of HPE’s Hybrid IT strategy and this move accelerates the company’s ability to deliver a modern, multi-cloud, multi-IaaS platform, powered by automation software and composable infrastructure.

For current HPE customers and partners, the company will continue to offer its existing hyperconverged products, the HC 380 and the HC 250.  For SimpliVity customers and partners, there will be no immediate change in the product roadmap and HPE will continue to support existing SimpliVity customers and platforms.

Within 60 days of closing the transaction, HPE intends to offer the SimpliVity Omni Stack software qualified for its ProLiant DL380 servers. In the second half of 2017, the company will offer a range of integrated HPE SimpliVity hyperconverged systems based on HPE ProLiant Servers.

Looking forward, HPE customers can expect to see their hyperconverged experience continue to improve with new innovations like “workspace” controls, which provide business leaders and developers with simple self-service portals to compose virtualized and containerized resources, and accelerate application development and deployment. Additionally, HPE will provide enhanced business insight, including predictive analytics, which will give IT managers the tools they need to increase resource utilization and proactively respond to needs for new resources.

HPE and SimpliVity believe that by bringing together their complementary product portfolios and leveraging HPE’s expansive go-to-market capability, partner ecosystem, and consumption model offerings, they will be able to significantly accelerate the financial performance of the combined business.

HPE expects the acquisition to be accretive to earnings in the first full fiscal year following close.

The transaction is expected to close in the second quarter of HPE’s fiscal year 2017, subject to regulatory review and approval, as well as other customary closing conditions and adjustments.