Nutanix Shares Take A Hit On HPE's Planned Acquisition Of Rival SimpliVity

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Share prices of hyper-converged infrastructure technology provider Nutanix took a hit Wednesday, the day after Hewlett Packard Enterprise said it would acquire SimpliVity, a Nutanix rival.

Nutanix saw its share price fall $1.88 (6.26%) to $28.17 in trading on Wednesday as investors assessed the potential impact of HPE moving into a market that has traditionally been dominated by smaller providers.

HPE said it plans to acquire Westborough, Mass.-based SimpliVity for $650 million in a deal expected to close in the second quarter of HPE's fiscal 2017. HPE plans to integrate the SimpliVity software and hardware with its industry-leading servers to grab a share of the fast-growing hyper-converged infrastructure market.

Analyst firm Gartner recently estimated that about 30 percent of the global storage array capacity installed in enterprise data centers would be deployed on either software-defined storage or hyper-converged infrastructure solutions based on x86 hardware systems by 2019, compared to under 5 percent now.

[Related: 23 Powerful Hyper-Converged Infrastructure Products]

Besides VMware, which develops a number of hyper-converged infrastructure technologies including VxRail, VxRack, and VSAN, Nutanix is the only publicly-listed vendor in this market. VMware shares fell $1.29 (1.58%) to $82.78 in Wednesday trading. 

Nutanix went public in late September of 2016 when it opened trade at $26.50 per share. Share prices spiked early on and, in the period between Oct. 3, 2016, and January 18, 2017, Nutanix shares have lost about 23 percent of their value.

Nutanix was unavailable to respond to questions about HPE's planned acquisition of SimpliVity.

Dell EMC is a large partner of Nutanix, selling the Nutanix technology integrated with Dell servers as the XC Series through its channel partners.

A Dell EMC spokesperson told CRN via email that the company is not concerned about potential impacts of the acquisition.

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