Partners: HPE SimpliVity Deal Will Open Hyper-Converged Sales Floodgates, 'As Big A Game-Changer As HPE Aruba'

Hewlett Packard Enterprise partners say the blockbuster acquisition of SimpliVity will in short order drive double-digit hyper-converged sales gains -- similar to the growth they saw from HPE's Aruba deal.

John Barker, co-founder and CEO of Versatile, an HPE and Aruba Platinum partner based in Marlborough, Mass., expects the HPE SimpliVity acquisition to "easily" lead to a 20 percent to 25 percent increase in hyper-converged sales for his company over the course of the next year. That is almost as big as the 30 percent sales kick that Versatile has seen over the last two consecutive years in the wake of HPE's acquisition of Aruba.

[Related: HPE Enterprise's Antonio Neri On The Blockbuster SimpliVity Acquisition And The Hyper-Converged Shortcomings Of Nutanix, Cisco And Dell-EMC]

"This is every bit as big a game-changer as HPE Aruba," said Barker, who was eyeing potential partnerships with Nutanix or SimpliVity before HPE made the acquisition. "It feels very similar to the Aruba deal. HPE partners like us can't wait for this to happen. There is a tremendous amount of opportunity in the hyper-converged market. It's a great deal for HPE at what seems like a low price."

Sponsored post

A CTO for a large national solution provider, who did not want to be identified, said he also sees the deal providing a breakout hyper-converged sales kick just like Aruba provided HPE in the wireless networking market.

"Not a lot of customers were evaluating what HPE had in the hyper-converged market prior to this," he said. "Now HPE is instantly in the hyper-converged conversation and mix. That is exactly what happened in the wireless market when HPE bought Aruba. HPE had no real legitimate play there, and then all of a sudden HPE was on every networking customer list right beside Cisco."

The CTO said the HPE SimpliVity deal -- like the Aruba deal -- may put the most intense pressure on Cisco, which is betting big on the Cisco HyperFlex hyper-converged offering and its Springpath partnership.

"I just don't know internally what Cisco is thinking," said the CTO executive. "They have a lot of work to do with HyperFlex. It's going to take a lot of effort and a lot of R&D to compete with HPE SimpliVity and [hyper-converged rival] Nutanix. Cisco is way, way behind."

The CTO said the $650 million price tag is a bargain price given the impressive SimpliVity software-defined storage portfolio. SimpliVity was valued at roughly $1 billion when the hyper-converged superstar raised $175 million in funding in March 2015.

"SimpliVity insiders were valuing the company at three to four times that," said the solution provider CTO. "HPE got a huge deal. SimpliVity is as much of a data management and data optimization play as it is a hyper-converged play. It's pretty big stuff for HPE to get this."

Just like Aruba helped HPE capture critical market share in the fast-growing wireless networking market, SimpliVity will open the door for big HPE share gains in the hyper-converged market, said Versatile's Barker.

"This deal gives HPE immediate street-level credibility in the hyper-converged market," Barker said. "HPE makes the best server on the market, but they were not in a leadership position in hyper-converged until they made this deal. As a loyal HPE partner, we were struggling to remain relevant in hyper-converged before this deal."

Ron Dupler, CEO of Kittery, Maine-based GreenPages, one of the leading cloud solution providers and an HPE and SimpliVity partner, said he sees the deal as another sign of the momentum behind customers looking to simplify their operations with software-defined offerings.

"It's a good move for HPE," said Dupler. "It looks like there is going to be some interesting offerings that come out of this based on the capabilities of HPE and SimpliVity. HPE has a lot of resources to scale and innovate off the SimpliVity platform."

In an interview with CRN Tuesday after plans for the acquisition were disclosed, Hewlett Packard Enterprise Group Executive Vice President Antonio Neri said the deal is a "phenomenal game-changer" that gives partners the ability to drive higher margins with a full hyper-converged and software-defined storage fabric offering aimed at the enterprise market.

"This is a full solution," said Neri. "We don't treat hyper-converged as an island like some of our competitors do. We treat it as part of a comprehensive strategy in the data center and hybrid IT world: one experience, software-defined, data mobility – which is important for our customers – all ultimately at a cost our customers are looking for."

HPE expects the hyper-converged market opportunity to grow from $2 billion to $5 billion over the next three years, said Neri. "Obviously, the hyper-converged market is a growing, exciting market because it is simple to deploy and scale," he said.

That is going to translate into a big opportunity for partners to grow sales and margins with a full software-defined storage fabric offering integrated with HPE OneView, 3Par and HPE Synergy Composable infrastructure, said Neri.

"For partners, this is going to be easy to sell because they can now sell a full portfolio depending on which workloads they want to land where," said Neri. "There is a lot of money and margins they can add here. The simplicity of bringing all of this together is the benefit to our partners. They can sell it as an integrated solution with the HPE brand and the benefits of the SimpliVity aspects of what we are acquiring here."