HPE Bolsters HPC Credentials With $1.3bn Cray Deal

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Veteran supercomputer maker Cray is to be acquired by HPE, to power its HPC push in the years ahead

HPE has announced that it is to acquire veteran supercomputer maker Cray Inc for a cool $1.3bn.

Under the terms of the deal, HPE will pay $35 per share value, which represents a premium of 17.4 percent to Cray’s last close of share trading.

It is fair to say that HPE has had some issues with past acquisitions. For example it is currently locked in a bitter dispute in a London courtroom with the former management of Autonomy. Its acquisition of Palm was also not widely considered to be a spectacular success either.

HPC move

Yet nevertheless HPE does have some good deals under its belt and it hopes that the Cray deal will assist its supercomputer and high performance computing (HPC) drive in the years ahead in areas such as federal contracts and academia.

“Answers to some of society’s most pressing challenges are buried in massive amounts of data,” said Antonio Neri, President and CEO, HPE. “Only by processing and analyzing this data will we be able to unlock the answers to critical challenges across medicine, climate change, space and more.”

“Cray is a global technology leader in supercomputing and shares our deep commitment to innovation,” said Neri. “By combining our world-class teams and technology, we will have the opportunity to drive the next generation of high performance computing and play an important part in advancing the way people live and work.”

HPE said that the explosion of data from artificial intelligence, machine learning, and big data analytics is driving strong HPC growth.

It believes that over the next three years the HPC segment of the market and associated storage and services is expected to grow from approximately $28bn in 2018 to approximately $35bn in 2021.

“This is an amazing opportunity to bring together Cray’s leading-edge technology and HPE’s wide reach and deep product portfolio, providing customers of all sizes with integrated solutions and unique supercomputing technology to address the full spectrum of their data-intensive needs,” said Peter Ungaro, President and CEO of Cray.

Cray supercomputers

“On behalf of the Cray Board of Directors, we are pleased to have reached an agreement that we believe maximizes value and are excited for the opportunities that this unique combination will create for both our employees and our customers,” said Ungaro.

Seattle-headquartered Cray is a real veteran of the IT industry, with the original company having been founded back in 1972 by Seymour Cray.

The firm still has US-based manufacturing operations and about 1,300 employees worldwide. It posted $456m in revenue in its last financial year.

Cray recently announced an Exascale supercomputer contract for over $600m for the US Department of Energy’s Oak Ridge National Laboratory. The system, which aims to be the world’s fastest system, will enable research and AI at scale, using Cray’s new Shasta system architecture and Slingshot interconnect.

At this stage there is no word on whether the deal will result in any redundancies however, but the two firms did mention that the acquisition would deliver “significant economic upside” which is expected to be “realized from the combination.”

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Author: Tom Jowitt
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