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Hewlett Packard Enterprise Buying SGI for $275M

By Sean Michael Kerner (Send Email)
Posted August 11, 2016

Hewlett Packard Enterprise (HPE) is announcing its intention to acquire SGI in a deal worth $275 million. SGI, the company formerly known as Silicon Graphics, has a long history in the High Performance Computing (HPC) space.

For more information on High-Performance Computing (HPC) Partner Offers

The deal is set to close in the first quarter of HPE's 2017 fiscal year. Data CenterUnder the terms of the deal HPE will pay $7.75 for each SGI share, which is a premium over the $5.98 the shares closed at the end of the Thursday trading day.

SGI and HPE are hardly strangers. In February of this year, HPE announced its new Integrity MC990 X server, which is a rack-mounted 8-socket platform that can scale up to 144 cores of compute.

The MC990 X is based on SGI's UV platform as the foundation, which HPE is OEM'ing. SGI UV is built on the power of advanced symmetric multiprocessing (SMP) technology and makes use of SGI's NUMAlink interconnect technology to enable rapid scale-out.

HPE Investing in the HPC and Big Data Space with SGI Acquisition

By acquiring SGI, HPE is further investing in the HPC space by bringing advanced technologies in-house.

"SGI's innovative technologies and services, including its best-in-class big data analytics and high-performance computing solutions, complement HPE's proven data center solutions designed to create business insight and accelerate time to value for customers," Antonio Neri, executive vice president and general manager, Enterprise Group, Hewlett Packard Enterprise, said in a statement.

For SGI, the acquisition brings new reach and new life for a company and a brand that has had more than its fair share of ups and downs in the last three decades.

SGI declared bankruptcy in 2007 and re-emerged in 2008 with the acquisition of HPC vendor Linux Networx. SGI itself was acquired by Rackable in 2009 for $25 million, with Rackable re-branding its entire company as SGI.

"Our HPC and high-performance data technologies and analytic capabilities, based on a 30+ year legacy of innovation, complement HPE's industry-leading enterprise solution," Jorge Titinger, CEO and president, SGI, said in a statement.

Analyst Patrick Moorhead commented that high performance computing (HPC), Big Data, AI and the public cloud are major growth areas in datacenter infrastructure. Infrastructure in the enterprise has been flat but could see improvements driven by the private cloud.

"SGI brings new technologies, capabilities and customers to HPE, and HPE will need to invest and integrate to make it additive," Moorhead said. "I believe this acquisition will make HPE more competitive in HPC and could do the same in Big Data."

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist

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