HPE Buying Supercomputer Maker SGI to Bolster HPC Portfolio - Page 2

Moorhead said SGI not only brings its supercomputers and big data capabilities, but also services and new customers that it's accumulated during three decades in the tech industry. The deal will make HPE more competitive in both the HPC and data analytics spaces, he said.

The deal comes at a time of transition for HPE, which was created in November 2015 when Hewlett-Packard split in two, separating its enterprise solutions business (HPE) from its PC and printer unit, which is now HP Inc. HPE is trying to navigate a rapidly changing business environment, where enterprises are running more workloads in public cloud environments rather than on servers in their own data centers. They're also looking to create their own private clouds.

Since the breakup of HP, HPE has spun out its IT services arm, sold off most of its stake in a subsidiary in India and continued to restructure its workforce. In addition, private equity firms reportedly are circling the company, interested in either buying HPE's software businesses—such as Autonomy or Vertica—or buying the company outright and taking it private. HPE officials have declined to comment on the reports.

SGI had been a top-tier system vendor in the 1980s and 1990s before the rise of increasingly powerful and lower-cost Intel-based servers began their domination of the data center. The company went through bankruptcy in the mid-2000s before being bought by Rackable Systems for $25 million in 2009. Rackable then adopted the SGI name, though the company still sells servers with the Rackable brand.