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HPE-SimpliVity deal raises support, price and development questions

With HPE's buy of No. 2 SimpliVity -- the first big deal in the HCI space -- IT pros see a more robust offering, but also higher prices and weaker support.

Concerns about price, support and development lead the list of unknowns after Hewlett Packard Enterprise's purchase of hyper-converged infrastructure maker SimpliVity Corp. this week.

With the deal, Hewlett Packard Enterprise (HPE) acquires what is widely considered the No. 2 vendor in the red-hot hyper-converged infrastructure (HCI) space behind Nutanix Inc. The goal is to lure more enterprise IT interest with a more complete converged lineup, but customers' reactions run the gamut, from anticipation to uncertainty to apathy.

The ski resort town of Vail, Colo., moved its Microsoft SQL Server and Oracle databases that supported 911 dispatch and video surveillance systems to SimpliVity OmniCube appliances. Vail chose SimpliVity after a "bake-off" with Cisco Unified Computing System (UCS) and Nimble Storage to meet an event-specific service-level agreement "beyond five nines," said the town's IT director, Ron Braden.

Braden said he doesn't see any advantage for customers like himself with SimpliVity under new HPE ownership. In fact, he said he expects the price will increase and support and development will vanish. In 31 years as an IT professional, he said he has yet to see an acquisition like the HPE-SimpliVity deal that has been successful.

"I guess there is always a first, and we still love the product, so will take a wait-and-see approach," he said.

HPE to help capture more enterprise attention

The $650 million cash purchase, expected to close by April, makes SimpliVity's technology the backbone of HPE's long-term HCI strategy, said Gina Longoria, an analyst at Moor Insights and Strategy, an analyst firm in Austin, Texas.

I guess there is always a first, and we still love the product, so will take a wait-and-see approach.
Ron BradenIT director, town of Vail, Colo.

HPE can say it is agnostic and supports multiple stacks, including OpenStack, VMware and Microsoft Hyper-V. "SimpliVity will be the bolt underneath to make it possible with the common data fabric," she said. SimpliVity software also will help add data services capabilities to make existing HPE products more robust.

HPE ownership will help strengthen SimpliVity's case for the enterprise, as its roster of public reference customers consists largely of small and medium-sized businesses. The company has partnerships with Dell EMC, Lenovo, Huawei and Cisco UCS servers for its appliance, but it makes sense now to go with the No. 1 server maker, HPE, Longoria said. The company launched with Cisco, and it has been the top choice for users, and HPE likely will continue to support SimpliVity products built on Cisco to help customers continue down the SimpliVity path, she said.

This is similar to VCE and what has become of the EMC converged platforms division, which built its converged infrastructure on Cisco before the EMC and Dell merger, and still supports products built on Cisco hardware.

Over time, though, look for a joint roadmap that will phase out Cisco, she said.

And keep an eye on how SimpliVity becomes part of HPE's multicloud strategy -- in addition to being the backbone of its HCI products, SimpliVity technology will likely help tie together hyper-converged infrastructure and composable infrastructure, Longoria said.

"I can see it making sense, as they look at more sophisticated composable elements," she said. "Their long-term view seems to be that the world will move to composable ... I'm not sure how and when that will happen, but they see it as an evolution."

No buyer's remorse

Capital Region Orthopedics in Albany, N.Y., was introduced to SimpliVity via its existing supplier, Cisco, and went with SimpliVity OmniStack with Cisco UCS after considering Vblock and traditional hardware from VMware, Cisco and EMC.

"It is a great product for us, and given our experience and its performance, I would make the same decision again," said the firm's CTO, Ray DeCrescente.

Lev Goronshteyn, CTO at CarePoint Health System in Jersey City, N.J., also won't second-guess his purchase of Dell XC Series hardware running Nutanix hyper-converged software. SimpliVity's technology is not game-changing, he said, so he sees no benefits for SimpliVity or HPE from this deal.

CarePoint has changed how it runs its data center, using new tools and features such as Acropolis Hypervisor and AOS 5.0, which includes a self service portal for teams to build their own virtual machines with predefined rules.

"We think of it as [Amazon Web Services] on-prem, because they are closely integrating with not just the virtual network, but the physical network, too," he said.

However, the HPE-SimpiVity deal could alter the direction of an upcoming refresh cycle at Dual Temp Co. Inc., a commercial mechanical contractor in Allentown, Pa., for its HPE servers that were bought about five years ago, said Woody Muth, business information director. Previously, as CIO at Worth and Co., he bought six SimpliVity OmniCubes after nearly selecting Nutanix -- but the purchase wasn't easy, because the company's owners viewed SimpliVity skeptically as an unknown company.

However, with SimpliVity now owned by HPE -- a well-known, multibillion-dollar, worldwide company -- he said he will more aggressively pursue the purchase of OmniCubes for Dual Temp.

Robert Gates covers data centers, data center strategies, server technologies, converged and hyper-converged infrastructure and open source operating systems for SearchDataCenter. Follow him on Twitter @RBGatesTT or email him at [email protected].

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