HPE to buy SGI for $275m

HPE acquires graphics veteran to add HPC and visualisation expertise

Tags: Hewlett-Packard CompanyHigh performance computingMergers and acquisitionsSGI (www.sgi.com)
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HPE to buy SGI for $275m HPE wil acquire SGO for $275m.
By  Mark Sutton Published  August 14, 2016

HPE has announced that it will acquire HPC and visualisation stalwart SGI for around $275m.

The deal will give HPE access to SGI's solutions in big data and high performance computing (HPC), the company said, as well as expand its presence in intensive computing customers such as government, research, and life sciences.

SGI began as Silicon Graphics in 1981, and was leader in high end graphics hardware and software, later expanding into 3D imaging, HPC, and visualisation solutions.

The company has undergone financial issues in recent years, with Silicon Graphics International filing for bankruptcy and then being bought by Rackable in 2009. The company has posted losses in recent years.

Antonio Neri, executive vice president and general manager, Enterprise Group, Hewlett Packard Enterprise commented on the deal: "At HPE, we are focused on empowering data-driven organizations," said. "SGI's innovative technologies and services, including its best-in-class big data analytics and high-performance computing solutions, complement HPE's proven data centre solutions designed to create business insight and accelerate time to value for customers."

"Our HPC and high-performance data technologies and analytic capabilities, based on a 30+ year legacy of innovation, complement HPE's industry-leading enterprise solutions. This combination addresses today's complex business problems that require applying data analytics and tools to securely process vast amounts of data," said 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."

TBR senior analyst Krista Macomber said that the deal will improve HPE's ability to maximize share in the strategically importanct analytics and HPC markets: "SGI provides HPE with more concentrated expertise in identifying and providing solutions that meet customer requirements in verticals such as financial services, government and life sciences, which have among the most demanding HPC requirements, historically. In addition to gaining access to these customers, TBR believes HPE will concentrate its HPC efforts around the SGI employee base and portfolio, applying this cachet to secure HPC-oriented deals across HPE's broader customer base.

"From a portfolio perspective, TBR expects rationalization to occur across the HPE and SGI server offerings. Most prominently, SGI potentially offers HPE a new means to migrate its portfolio and install base off of Intel's Itanium processors - which continue to shrink in demand due to industry commoditization - in the mid to long term. In the short term, SGI provides competencies around scalable, high-performance storage that will be valuable to HPE as Dell nears its proposed acquisition of EMC. Additionally, SGI's systems and data management and visualisation software, and consulting and support services will better position HPE to compete against vendors such as IBM, Fujitsu and others as an analytics and HPC solution provider, as opposed to a systems provider. In particular, SGI brings unique IP in bundling HPC-dedicated infrastructure for SAP HANA to HPE. This approach will help HPE secure its traction in customers' analytics workloads and expand this footprint in underpenetrated environments."

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