HP is said to be in talks to buy Simplivity, a startup whose main offering is the Omnicube converged server/storage/networking systems.
The Omnicube is a so-called hyper-converged system, designed from the ground up to eliminate the data centre chaos of independent server, storage and networking products that have to be separately acquired, integrated and operated.
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It is more cost-efficient, according to Simplivity and fellow converged system startup Nutanix, to buy and operate all-in-one unified boxes, or generation 1 converged systems built from separate components by EMC and Cisco’s VCE and converged system reference architectures like Cisco and NetApp’s FlexPod.
It is suspected that EMC has its own hyper-converged offering development.
Both Simplivity and Nutanix are growing strongly and their scale-out boxes could be used by both public and private cloud providers.
Simplivity’s history looks like this:
- Founded in 2009 by Chairman and CEO Doron Kempel
- $18m initial and then A-round funding in January 2012
- Omnicube first shipped in August 2012
- $500,000 debt financing in September 2012
- $25m B-round funding in September 2012
- Nvidia partnership for VDI in October 2013
- $58m C-round funding in November 2013
Kempel was a founder of deduplication startup Diligent, bought by IBM for $200m in 2008, who crafted ProtecTIER products from its technology.
Simplivity’s total funding is $101.5m, and a 5x payout for investors suggests a buy price of around half a billion dollars would be on the table.
The logic of an HP Simplivity buy could look compelling – but that view from the back of a hack’s envelope would be of little use to hard-nosed M&A execs. HP’s last big acquisition, Autonomy, turned out badly and was painfully expensive, at $8.8bn and counting.
Simplivity would be a more affordable morsel in comparison, but HP, with its own storage, server and networking product business could build its own converged server/storage/networking system if it wanted. Buying Simplivity and replacing some of its components with its own would be a short cut to selling a converged system by HP.
Neither HP nor Simplivity commented on the acquisition rumour, first reported by trade mag CRN. ®