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HPE's spin/merge and acquisition strategy

mikeshaw747
This post was written by Jason Newton, Vice President of pan-HPE strategic marketing. It is in response to a request I made of Jason to comment on an Infographic that has just been published showing HPE’s spin, merges and acquisitions. 
 
spin-merge-acquire.png
 
HPE’s spin, merge and acquire journey” all starts with our point of view about where the world is going. We believe it is going to be driven by demand from the business for digital transformation.
HPE’s spin, merge and acquire “journey” all starts with our point of view about where the world is going. We believe it is going to be driven by demand from the business for digital transformation.
This need to embrace digitization is going to drive a new IT landscape:
 
  • A new architecture for applications. This is typically known as cloud native”, but I feel that that phrase doesn’t really characterise the architecture, not least because it doesn’t have to be hosted in the cloud. I personally prefer Gartner’s phrase, mesh applications and services”. Gartner says that rather than use the three tier architecture of the past, we connect together series of services to create applications.  Typically, mesh application and services architectures are created using containers - they don’t have to be, but they increasingly are (this could well be why Docker has had over 4 billion downloads)
  • Changes in application functionality are made at speed. And our approach to application functionality is much more experimental - we release something and see how it goes, adjusting,even fast failing”, as required
  • In a world of digital transformation, we no longer engage in large, 18 month application development projects. Instead, we take lots of smaller steps. Because of this, putting in place application and data & analytics platforms to support this multi-step approach becomes important
  • Data analytics is increasingly being performed in real time. And a lot more data is being analysed, increasingly using machine learning. Where the amounts of data are huge or where fast reaction is needed, analytics must be performed at the edge - in the oil rig, in the autonomous car, at the airport perimeter fence, at the hospital bed. And because machine learning requires huge training data sets and large amounts of analysis, we will often need high performance computing at the core to do this machine learning training”. 
  • A hybrid world where applications and analytics run on both public cloud and on premises.  
 
I would put our spin/merge and acquire moves into two buckets:
 

1. Moves to increase focus

We all know the theoretical importance of focus, but it’s only since the spin/merges have come to fruition that I’ve come to realise how incredibly important focus is - it becomes much clearer exactly what our development plans should be, the importance of partnerships and who we should partner with becomes clearer, our go to market efforts become simpler, which companies we need to acquire becomes clearer, and exactly who we are competing against becomes simpler and glaringly obvious.
 
Not only did the spin/merges create a series of industry leading companies in their respective spaces HPE, HP inc, DXC, and the new software company but these changes freed up money and resources that HPE management could use on our core strategy. You’ve already seen HPE put this to good use in accelerating our strategy via acquisition.
 

2. Moves to accelerate HPE’s strategy

We believe that to simplify hybrid IT we need to first help customers define and optimize their right mix for their applications and data & analytics.
We believe that to simplify hybrid IT we need to first help customers define and optimize their right mix for their applications and data & analytics
Pointnext services
There has been some commentary that HPE is getting out of services. This is not true. With the launch of our new services arm, Pointnext, we are focussing on advice and integration to build the application and data & analytics platforms our customers need to support their digital transformations. Hosting and managing legacy environments, etc, is not part of that focus. 
 
Pointnext and the acquisition of Cloud Cruiser bring key capabilities to bare to help advise, migrate and optimize our customers’ right mix of cloud versus on premises, of core versus edge compute and of traditional versus high performance compute.
 
Software-defined infrastructure for both existing and new apps and data & analytics
The other element that is critical is software-defined infrastructure.
 
Every customer has a current IT infrastructure, application and data & analytics landscape, and a need to build next generation platforms for the new landscape I described above (agile app dev, next-gen analytics, etc).
 
Software-defined infrastructure is critical in simplifying and cutting the costs of that current environment, while at the same time building a bridge and laying the foundation for these new app and data & analytics platforms required by the new digital world.
 
Our approach is to unify applications and data & analytics on a common software-defined architecture that can seamlessly manage across on premises and multi-cloud.
 
To accelerate our software-defined infrastructure capabilities we acquired Simplivity and Nimble. 
 
These complement, and will be integrated with, our work in HyperConverged and Synergy to fulfil our software-defined infrastructure vision.
 
Containerization is essential in a world of mesh applications and services and thus, the extended partnerships with Docker and our pathfinder investments with companies like Mesosphere are aimed here. Our increased depth of partnership with Microsoft on Azure is part of accelerating this part of our strategy.
Software-defined infrastructure is critical in simplifying and cutting the costs of that current environment, while at the same time building a bridge and laying the foundation for these new app and data & analytics platforms required by the new digital world
 

The move to the edge

In terms of the edge, we saw this shift happening and acquired Aruba giving us an instant leading position.
 
As the internet of things space continues to explode (as does the attack surface that can be hacked), security is becoming one of the biggest challenges. That’s why we acquired Niara, adding machine learning to Aruba’s existing security products.
 

We are not getting out of software - we are changing the type of software we own and partner with

Commentary that HPE is getting out of software is simply not true.
 
The reality is that we are focusing our strategy in new directions. We are focussed on software that enables software-defined infrastructures and making hybrid IT simpler. Hence the acquisitions of Simplivity, Nimble and Cloud Cruiser, and Pathfinder” investments in the likes of Mesosphere and Arista networks.
 

The changing requirements of data & analytics

Lastly, data & analytics is increasingly becoming the core of any digital enterprise. Time to insight and action will be the number one competitive advantage for many companies and government agencies, but the data sets are increasing exponentially and the analytics like deep learning that we want to perform on them, is computationally challenging.
 
We will need new approaches and computer architectures, which is why HPE acquired SGI, and why Hewlett Packard Labs and HPE’s high performance computing division continues research and productisation of memory-driven computers.
 

Mike Shaw
Director Strategic Marketing

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linkedin.gifMike Shaw

About the Author

mikeshaw747

Mike has been with HPE for 30 years. Half of that time was in research and development, mainly as an architect. The other 15 years has been spent in product management, product marketing, and now, strategic marketing. .

Comments
PeteHoward

As a 21 year partner with Silicon Graphics, I can say the SGI acquisition for their Data Analytics (UV line) and High Performance Computing (ICE line) expertise is likely the best way these innovative architectures could have continued to grow.  With HPE, HP Labs, the success of Apollo, and now SGI's IP the new complimentary product lines will better meet the needs and budgets of our customers.  Excited to be a part of the HPE increased focus in HPC! 

mikeshaw747

Thanks Pete. Yes, HPE has an increased focus on high performance computing, not least because of Hewlett Packard Labs' vision for memory-driven computing with their continued work on The Machine. 

In this week's post, I've collected news items about what's happening in the world of data and analytics. Much of it is to do with machine learning, and the main way in which machine learning systems are trained is thru neural networks. Training a neural network requires a lot of compute - high performance compute. 

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