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HPE Completes Acquisition of Supercomputing Leader Cray Inc.
September 2019 by Marc Jacob
Hewlett Packard Enterprise announced it has completed the acquisition of supercomputing leader Cray Inc., earlier than the original target date. HPE paid $35.00 per share, in a transaction valued at approximately $1.4 billion, net of cash.
The explosion of data is driving a significant expansion of high performance computing (HPC) as customers seek to unlock the power of their data through artificial intelligence, machine learning, and big data analytics, requiring technologies that can power exascale-class performance. Over the next three years, the HPC segment of the market and associated storage and services is expected to grow from approximately $28 billion in 2018 to approximately $35 billion in 2021.
HPC is a key component of HPE’s vision and growth strategy as it provides the backbone to process, analyze and extract insights from massive amounts of data. The combination of HPE and Cray is expected to deliver significant customer benefits and future offerings including:
• Enhanced portfolio: Extends HPE’s industry-leading HPC and AI portfolio, which provides more choice and flexibility for data intensive workloads;
• Technology innovation: Increases R&D infrastructure and expertise to accelerate development of new products and solutions;
• Service and support: Augments worldwide capabilities and coverage, especially within Supercomputing, where high customer touch is paramount;
• Exascale leadership: Supercomputing leadership demonstrated by winning the first three exascale systems in the United States; and
• HPC-as-a-Service and AI / ML analytics through HPE GreenLake offering customers choice, flexibility and speed to market.
As part of the acquisition, Cray president and CEO Peter Ungaro, will join HPE as head of the HPC and AI business unit in Hybrid IT.
Both HPE and Cray continue to win new customers. For instance, in the last two quarters, The Department of Energy has selected Cray’s Shasta supercomputing systems and Slingshot interconnect for the first three exascale systems in the United States. Cray has generated more than $1.5B in bookings to date for its new Shasta supercomputing systems.
HPE also recently announced a four-year, multi-phase collaboration between HPE and NASA’s Ames Research Center to build a new supercomputer, which NASA has named “Aitken,” based on the HPE SGI 8600 system. Aitken will support modeling and simulations of entry, descent and landing for future lunar landings.
Together, HPE and Cray will create greater opportunities for growth — and lead the exascale era of high performance computing through an integrated platform, broader scale and combined resources.
Transaction Details
Cray is another example of HPE successfully accelerating its strategy and enhancing its competitive position through acquisitions. Bringing together HPE and Cray enables an enhanced financial profile for the combined company. The acquisition is expected to be accretive to HPE non-GAAP operating profit and earnings in HPE’s fiscal year 2020. HPE will discuss how the integration of Cray supports significant economic upside through enhanced growth and profitability at its Securities Analyst Meeting on October 23, 2019.
