HPE takes SGI

Monday 15th August 2016
SGI Origin 3800 at Stamford

In a joint release,  HPE (Hewlett Packard Enterprise) announced it is to acquire rival server maker SGI for about $275 million, inclusive of cash and debt, ending a seven-year reprieve that kept the SGI afloat, after Rackable Systems purchased the bankrupt Silicon Graphics Inc. for $25 million in 2009 and assumed the SGI brand. This move will strengthen HPE's position in $11 billion HPC segment, growing at an estimated 6-8% CAGR, and in the data analytics segment, growing at over twice that rate.  HPE will expand its presence in key HPC verticals such as government, research, and life sciences

“Big data combined with HPC is creating new solutions, adding many new users/buyers to the HPC space,” stated IDC in the June HPC market update. A joint announcement from HPE and SGI focused on how this explosion in data is driving increased adoption of high-performance computing and advanced analytics technologies in government and commercial sectors. HPC systems are critical for advancing such fields as weather forecasting, life sciences, and increasingly for cybersecurity and fraud detection, said HPE.

“Once the domain of elite academic institutions and government research facilities, high-performance computing (HPC) – the use of ‘super’ computers and parallel processing techniques for solving complex computational problems – is rapidly making its way into the enterprise, disrupting industries and accelerating innovation everywhere. That’s because businesses today are recognising the big potential in the seas of their corporate data,”  says Antonio Neri, (right) executive VP and GM, HP Enterprise Group.

 “Organisations large and small are adopting HPC and big data analytics to derive deeper, more contextual insights about their business, customers and prospects, and compete in the age of big data. These businesses see revenues opportunity in the explosion of data being generated from new sources, as the proliferation of mobile devices, the Internet of Things, the ever-expanding olumes of machine-generated data, and the increase of human data in the form of social media and video.”

SGI CEO Jorge Titinger (left)  also emphasized the benefits of the union for data-driven organizations. “Our HPC and high performance data technologies and analytic capabilities, based on a 30+ year legacy of innovation, complement HPE’s industry-leading enterprise solutions. This combination addresses today’s complex business problems that require applying data analytics and tools to securely process vast amounts of data,” he said. “The computing power that our solutions deliver can interpret this data to give customers quicker and more actionable insights. Together, HPE and SGI will offer one of the most comprehensive suites of solutions in the industry, which can be brought to market more effectively through HPE’s global reach.”

SGI makes server, storage and software products, but it’s the UV in-memory computing line is the coveted star of the company’s portfolio. In February, SGI signed an OEM agreement with HPE for its UV 300H technology, a version of the SGI UV 300 supercomputer that is purpose-built for SAP HANA.  The 8-socket server “filled the gap between its HPE ProLiant DL580 Gen9 Server, with 4-socket scalability at the low end, and HPE Integrity Superdome X server that scales up to 16 sockets and 24 TB of memory at the high end.”

Dell and Cisco are both resellers for the entire SGI UV 300H line, which scales as a single node system from 4-32 sockets in four socket increments. In the high-end supercomputing segment (systems above $500k per IDC), HPE was the top earner among HPC server vendors in 2015: taking in $1.23 billion in revenue out of a total $3.28 billion. Cray came second ($583 million) and Lenovo ($391 million). SGI’s share was $88 million.

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