HPE Completes Acquisition of Cray, Deal Previously Announced

Hewlett Packard Enterprise Development LP completed the acquisition of supercomputing firm Cray Inc. earlier than the original target date.

HPE paid $35.00 per share, in a transaction valued at approximately $1.4 billion, net of cash.

The explosion of data is driving an expansion of HPC as customers seek to unlock the power of their data through AI, ML, and big data analytics, requiring technologies that can power exascale-class performance. Over the next 3 years, the HPC segment of the market and associated storage and services is expected to grow from approximately $28 billion in 2018 to approximately $35 billion in 2021 (1).

HPC is a key component of its vision and growth strategy as it provides the backbone to process, analyze and extract insights from massive amounts of data.

The combination of the two companies is expected
to deliver customer benefits and future offerings including:
• Enhanced portfolio: Extends HPE’s HPC and AI portfolio, which provides more choice and flexibility for data intensive workloads;
• Technology innovation: Increases R&D infrastructure and expertise to accelerate development of new products and solutions;
• Service and support: Augments worldwide capabilities and coverage, especially within HPC, where customer touch is paramount;
• Exascale leadership: Supercomputing leadership demonstrated by winning the first three exascale systems in the United States; and
• HPC-as-a-Service and AI / ML analytics through HPE GreenLake offering customers choice, flexibility and speed to market.

“Bringing together Cray and HPE establishes the most comprehensive end-to-end portfolio across compute, storage, software and services in the fast-growing HPC and AI market segments,” said Phil Davis, president, hybrid IT, HPE. “But, the real value is what we can accomplish together as one team. We are united in our vision to be a global leader in HPC. By combining the teams’ deep expertise and R&D engines, we are better positioned to help our customers solve their most data-intensive challenges both today and well into the future.“

As part of the acquisition, Cray president and CEO Peter Ungaro, will join HPE as head of the HPC and AI business unit in hybrid IT.

“For almost 50 years, Cray has been dedicated to being a leader in supercomputing in support of our customers’ most important missions,” he said. “Cray and HPE have a shared vision for the new exascale era, and by joining forces, we’re offering the promise of Cray’s technology to an expanded market with the opportunity to leverage HPE’s breadth, scale and innovation to bring supercomputing to the enterprise. I’m excited for this next chapter, and on behalf of our company and board of directors I’d like to thank our valued customers, partners, shareholders and, of course, our employees, for all of their contributions in making Cray a leader in high-performance computing.”

Both firms continue to get new customers. For instance, in the last two quarters, The US States Department of Energy has selected Cray’s Shasta supercomputing systems and Slingshot interconnect for the first 3 exascale systems in the United States. HPC form has generated more than $1.5 billion in bookings to date for its new systems.

HPE also recently announced a 4-year, multi-phase collaboration between HPE and NASA’s Ames Research Center to build a new HPC, which NASA has named Aitken, based on the its SGI 8600 system. Aitken will support modeling and simulations of entry, descent and landing for future lunar landings.

Together, the two companies will create opportunities for growth – and lead the exascale era of HPC through an integrated platform, broader scale and combined resources.

The acquisition is expected to be accretive to HPE non-GAAP operating profit and earnings in HPE’s FY20.

(1) Source: Hyperion May 2019

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HPE Acquired Cray for $1.3 Billion
To expand into HPC compute and storage
May 20, 2019 | Press Release