Yesterday HPE announced it is buying Nimble Storage for a little over 1 billion dollars. That news took almost everyone off-guard and also brought the immediate, “HPE is crazy”, reaction. Instead of writing something up right away, I needed to give this acquisition some thought because at first pass it does indeed seem crazy. Afterall HPE already owns storage properties like 3PAR and StoreVirtual (former LeftHand) and they just recently bought Simplivity. But the acquisition is really not that crazy if you consider the current state of the large storage vendor market.
HPE vs. Dell EMC
HPE clearly sees Dell EMC as its primary competitor. If you look at the acquisition in that light, then it starts to make more sense. HPE probably feels it needs to cover the same bases that Dell EMC does. The current 3PAR offering can compete in the large enterprise which demands sophisticated features and high reliability. HPE can easily position 3PAR against and focus on Dell EMC’s VMAX family and XtremIO. At the other end of the spectrum is external storage arrays small data centers use or as part of a software defined storage (SDS) initiative. HPE can position MSA storage hardware against Dell’s PowerVault offering to meet that market demand.
Nimble’s Role within HPE
The problem is that HPE had nothing to easily compete or at least line up with Dell EMC’s Unity, which according to our checks is doing quite well in the market. Sure HPE had StoreVirtual but for a customer looking for a dedicated, non-clustered array, HPE had a hole – a hole Nimble now fills. Look for HPE to use Nimble as their mainstream workhorse solution in the same way the Dell EMC uses Unity. My guess is Nimble essentially replaces StoreVirtual for this use case.
There is also the appeal of Nimble’s InfoSight, an analytics tool Nimble created to deliver incredible insight into the behavior of Nimble arrays in the field. We did a video with Nimble discussing InfoSight when it first came to market. InfoSight enables organizations to be proactive in their management of the storage system.
Simplivity’s Role within HPE
Dell has a deep bench of hyperconverged solutions built primarily from the VMware framework. HPE obviously has access to that same framework, but now with Simplivity it has a very specific alternative. Look for Simplivity to replace StoreVirtual in the turnkey hyperconverged market.
What about StoreVirtual?
It seems like StoreVirtual is the odd man out. But maybe not. HPE could position this as an alternative to ScaleIO for hyperscale data centers wanting hypervisor flexibility. I’m not sure how well that comparison will work but it is a logical path for HPE to take.
Is There Overlap?
There is plenty of overlap in the HPE product line, as there is in the Dell EMC line. That’s the point. The role of a large vendor is similar to that of a supermarket. Provide you with plenty of choices and let you pick the option that makes the most sense for you. The role of a start up is similar to that of a butcher shop. They don’t sell you cereal but they do offer the finest quality steaks.
I rate a successful storage vendor acquisition by seeing if 1+1=3. In this case, can adding Nimble to the HPE family result in the sales of more Nimble Storage systems without cannibalizing the sales of HPE’s other storage products. Will HPE be successful in this acquisition? They have a good but not perfect track record with acquisitions. But now they have two (Simplivity and Nimble Storage) relatively big ones to integrate in, at almost the same time.
My guess is HPE will at a minimum “do no harm” and at least keep it to 1+1=2. If I were a Nimble Storage or Simplivity customer, I certainly wouldn’t panic and start looking for new vendors. If I were just getting ready to buy a Nimble or SimpliVity solution, I’d probably still move forward with it. These products are as safe as they can get right now. If you are just starting your primary storage upgrade, I’d be a little more careful and make an assessment on how joining a large organization, combined with the potential for some talent loss, will impact innovation.