Hewlett-Packard Enterprise, which relies heavily on its data storage and management businesses for a stable financial bottom line, apparently now has the all-flash storage intellectual property it needs to maintain parity with the Pure Storages, Dell EMCs and IBMs of the world.
HPE revealed March 7 that it has acquired Nimble Storage for $1 billion in cold cash. That equates to $12.50 per share. As a bonus, HPE said it will assume or pay out Nimble's unvested equity awards, which will have an approximate value of $200 million at closing of the deal, which is expected in Q3.
In the deal, HPE inherits Nimble's set of 10,000 enterprise customers. Not a bad addition to the HPE sales charts.
The deal comes on the heels of the $650 million acquisition announced Jan. 17 of hyperconverged storage provider Simplivity. HPE now owns the intellectual property of several former independent storage startups from the last decade, including StorageApps, AppQ, PolyServe, IBrix, TransSoft, Lefthand Networks and 3PAR. Nimble is merely the newcomer on the block.
There are quite a few smaller, new-gen storage companies out there; most (but not all) of them are not making money and are dying to be acquired. Those include companies such as Pure Storage, Tintri, Kaminario, Tegile, ClusterHQ, Pivot3 and several others.
So what was it that brought Nimble to HPE's acquisition attention?
"First, we liked the whole infosight message and capability," HPE Senior Vice President and General Manager of Storage and Big Data Bill Philbin told eWEEK. "Nimble sort of turns the support model on its ear by providing predictive analytics; not only does it manage the storage asset but it reaches up into the customer's virtualized applications and looks at rogue VMs, noisy neighbor syndrome, et cetera.
"We thought, taking that along with the rich telemmetry that we already have phoning home from 3PAR and merging that all together, that this would provide an interesting capability for our entire storage portfolio."
Secondly, Philbin said, Nimble brings flash further down the portfolio for SMBs and midmarket users because "it is very easy to use, easy to install and self-maintaining. We see it as very complementary to 3PAR."
For users who are more price-conscious, Philbin said, "we still have MSA (storage appliance) and StoreVirtual at the entry level. This (Nimble) is a really good fit from a product perspective and good fit from a cultural perspective—very synonymous with ours."
Flash storage is a fast-growing market and an increasingly important element of hybrid IT environments. Storage analysts consider the overall flash market to have been about $15 billion in 2016 and expect it to grow to nearly $20 billion by 2020, expanding at a 17 percent compound annual growth rate.
HPE plans to incorporate Nimble's InfoSight Predictive Analytics platform across its storage portfolio, Philbin said. For example, InfoSight automatically detects 90 percent of all issues within a customer's infrastructure and resolves 85 percent of them, HPE said. This reduces the amount of time and effort a customer's IT team spends on support activities.
Nimble Revenue in 2016: $402 Million, Up 25 Percent YOY
Nimble was founded in 2007 and has about 1,300 employees worldwide. The company delivered revenue of $402 million in its most recent fiscal year, up 25 percent year over year.
Nimble's analytics platform goes beyond storage to analyze performance issues across the full data path, from apps to the array, and resolves most issues before they occur, Philbin said. In addition, Nimble recently has introduced multicloud storage services that combine on-premises and public cloud storage capabilities for hybrid IT deployments.
What the New Deal Will Bring Users
Key customer benefits of the combined HPE and Nimble portfolio include:
--the ability to move data and replicate across hybrid flash and all-flash storage to meet unpredictable IT demands;
--integrated data protection with application aware snapshots, encryption, replication and integration with leading independent software vendors;
--intuitive management of storage volumes along with data compaction to reduce capacity costs;
--predictive support automation to anticipate and prevent most problems and solve remaining issues in minutes;
--quality of service controls and full stack analytics to ensure predictable performance in hybrid IT deployments;
--increased dedicated sales specialist support; and
--a future-proofed technology platform with a roadmap to support next-generation storage.
"Customers deploying hybrid IT not only need the performance of flash storage but are looking for predictive intelligence to optimize their infrastructure," Antonio Neri, HPE Executive Vice President and General Manager of the Enterprise Group, wrote in a blog post. "With Nimble Storage and 3PAR, we can now deliver on those storage needs."
"Over 10,000 enterprises are using Nimble Storage because our Predictive Cloud Platform is reliably fast, radically simple, and cloud ready," Nimble CEO Suresh Vasudevan said. "This acquisition validates our technology leadership in flash and in the use of cloud-based predictive analytics."
What Industry Leaders Are Saying
"Many industry watchers have long pointed out that storage players with conventional architectures and a focus on speeds and feeds, will not be able to deliver a well thought out approach to enterprise cloud and will face a dead end. Only highly differentiated technologies that can deliver automation, predictive analytics and self-service will help CIOs create a public cloud like experience within their four walls."
—Kieran Harty, CTO and co-founder of Tintri
"Nimble's acceptance of HPE's buyout offer demonstrates that the climate is not hospitable for standalone on-premises storage providers. Anticipation that future growth will be challenging made the HPE buyout very attractive to Nimble's board of directors. Future storage market growth and customer attention will be directed towards software-defined, multi-cloud-capable architectures. Large enterprises in particular seek web-scale technologies to support their constantly growing data storage requirements spanning both private and public clouds." —Patrick Rogers, Cohesity's vice president of marketing and product management
"We are confident in our solutions and ability to compete successfully against a combined HP-Nimble. Our Data Fabric portfolio of flash-enabled, cloud-integrated offerings provides customers with the future-proof solutions required for success in a data-centric world. In the all-flash array market, there's no question we're growing faster than competitors and the industry. In cloud, our ability to help customers seamlessly manage their data as they adopt the cloud is a clear differentiator. We recently shared our intent to deliver the next generation of hyper-converged infrastructure, built on SolidFire innovation, which will be the first fully cloud-integrated HCI solution in the industry. It will bring enterprise customers the flexibility to run multiple workloads without compromising performance, scale, or efficiency. We offer the only portfolio that ensures customers will have seamless data management across all their deployment models, whether on-premises, hybrid or public cloud environments." —Brett Roscoe, vice president, Product, Solutions & Services Marketing, NetApp
"On the heels of its SimpliVity acquisition, today's news validates the market opportunity for on-premises IT. This is because hybrid continues to be the "on ramp" for all-flash data centers. This will also fill the gap in HPE's product lines created by their aging LeftHand and MSA lines. HPE will need to draw the line between their Nimble and 3PAR products, which currently overlap." —Rohit Kshetrapal, CEO of Tegile.
"Lenovo announced an alliance with Nimble in October 2016 and the relationship was in its early stages. As such, there is virtually no impact on either our customers or product portfolio. Going forward, we will expand our efforts to bring the compelling benefits of flash-based storage to our customers, both in traditional data center infrastructure and next-generation IT solutions. In fact, we plan to introduce new flash storage offerings later this year." —Lenovo's Data Center Group
"It's a smart move for HPE as it expands their storage portfolio to serve even more market segments, and Nimble's predictive flash arrays are certainly among the strongest solutions in the market. The storage industry is no stranger to consolidation, and as flash and hybrid flash arrays become the norm in the enterprise data center, it makes sense that the big players would seek to acquire advanced solutions that will give them a competitive edge. And it gives Veeam customers the opportunity to have an end-to-end integrated approach with Veeam, HPE and Nimble technologies." —Andy Vandeveld, VP of Global Alliances at Veeam