HPE Gobbles SGI for Larger Slice of $11B HPC Pie

By Tiffany Trader

August 11, 2016

Hewlett Packard Enterprise (HPE) announced today that it will acquire rival HPC server maker SGI for $7.75 per share, or about $275 million, inclusive of cash and debt. The deal ends the seven-year reprieve that kept the SGI banner flying after Rackable Systems purchased the bankrupt Silicon Graphics Inc. for $25 million in 2009 and assumed the SGI brand.

Bringing SGI into its fold bolsters HPE’s high-performance computing and data analytics capabilities and expands its position across the growing commercial HPC market and into high-end supercomputing as well. Per analyst firm IDC’s latest figures, the HPC market is at $11 billion and set to grow at an estimated 6-8 percent CAGR over the next three years. The data analytics segment, which is very much in play here, is said to be growing at over twice that rate. “Big data combined with HPC is creating new solutions, adding many new users/buyers to the HPC space,” stated IDC in its 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 recognizing the big potential in the seas of their corporate data,” Antonio Neri, executive vice president and general manager, HP Enterprise Group, shared in a blog post.

He continued: “Organizations 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 revenue opportunity in the explosion of data being generated from new sources, like the proliferation of mobile devices, the Internet of Things, the ever-expanding volumes of machine-generated data, and the increase of human data in the form of social media and video.”

SGI CEO Jorge Titinger 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 that has lately been 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. As noted by EnterpriseTech Managing Editor Doug Black, the 8-socket server “filled the gap between its HPE ProLiant DL580 Gen9 Server, with 4-socket scalability at the low end, and the HPE Integrity Superdome X server that scales up to 16 sockets and 24 TB of memory at the high end.”

Notably 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. Just how the SGI sale will affect these arrangements remains to be seen, but it’s hard to imagine Dell as a reseller for HPE.

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 in second ($583 million) and then Lenovo ($391 million). SGI’s share was $88 million.

IDC 2015 Revenue Share by Vendor - supercomputing

SGI, now located in Milpitas, Calif., after selling its storied Silicon Valley headquarters to Google in 2006, brought in $533 million total revenue in FY16 and $521 million in FY15. Its GAAP net loss for 2016 was $11 million, or $(0.31) per share compared with a net loss of $39 million, or $(1.13) per share in 2015. The company has approximately 1,100 employees.

The deal’s $7.75 per share price represents a 30 percent premium over today’s closing price of $5.98. In after hours trading, shares of SGI have gone up by nearly 30 percent to $7.70. HPE’s stock closed today at $21.78, falling just .05 percent in after hours trading to $21.77.

The transaction is on track to close in the first quarter of HPE’s fiscal year 2017, after which SGI will become part of the HPE Data Center Infrastructure group, led by Alain Andreoli. HPE expects the impact on earnings to be neutral in the first full year after close of sale and accretive thereafter.

The SGI purchase is the latest in a series of big changes for the HP brand. Last September, Hewlett-Packard officially split the PC and printer business from its enterprise (and HPC) activities, creating Hewlett-Packard Enterprise (HPE) to focus on servers, storage, networking, security and corporate services. In May, HPE went through another split when it merged its enterprise services unit with CSC to create a $26 billion “pure-play” IT services organization.

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

HPE Wins $57 Million DoD Supercomputing Contract

February 20, 2018

Hewlett Packard Enterprise (HPE) today revealed details of its massive $57 million HPC contract with the U.S. Department of Defense (DoD). The deal calls for HPE to provide the DoD High Performance Computing Modernizatio Read more…

By Tiffany Trader

Topological Quantum Superconductor Progress Reported

February 20, 2018

Overcoming sensitivity to decoherence is a persistent stumbling block in efforts to build effective quantum computers. Now, a group of researchers from Chalmers University of Technology (Sweden) report progress in devisi Read more…

By John Russell

Fluid HPC: How Extreme-Scale Computing Should Respond to Meltdown and Spectre

February 15, 2018

The Meltdown and Spectre vulnerabilities are proving difficult to fix, and initial experiments suggest security patches will cause significant performance penalties to HPC applications. Even as these patches are rolled o Read more…

By Pete Beckman

HPE Extreme Performance Solutions

Safeguard Your HPC Environment with the World’s Most Secure Industry Standard Servers

Today’s organizations operate in an environment with ever-evolving threats, and in order to protect themselves they must continuously bolster their security strategy. Hewlett Packard Enterprise (HPE) and Intel® are addressing modern security challenges with the world’s most secure industry standard servers powered by the latest generation of Intel® Xeon® Scalable processors. Read more…

Intel Touts Silicon Spin Qubits for Quantum Computing

February 14, 2018

Debate around what makes a good qubit and how best to manufacture them is a sprawling topic. There are many insistent voices favoring one or another approach. Referencing a paper published today in Nature, Intel has offe Read more…

By John Russell

Fluid HPC: How Extreme-Scale Computing Should Respond to Meltdown and Spectre

February 15, 2018

The Meltdown and Spectre vulnerabilities are proving difficult to fix, and initial experiments suggest security patches will cause significant performance penal Read more…

By Pete Beckman

Brookhaven Ramps Up Computing for National Security Effort

February 14, 2018

Last week, Dan Coats, the director of Director of National Intelligence for the U.S., warned the Senate Intelligence Committee that Russia was likely to meddle in the 2018 mid-term U.S. elections, much as it stands accused of doing in the 2016 Presidential election. Read more…

By John Russell

AI Cloud Competition Heats Up: Google’s TPUs, Amazon Building AI Chip

February 12, 2018

Competition in the white hot AI (and public cloud) market pits Google against Amazon this week, with Google offering AI hardware on its cloud platform intended Read more…

By Doug Black

Russian Nuclear Engineers Caught Cryptomining on Lab Supercomputer

February 12, 2018

Nuclear scientists working at the All-Russian Research Institute of Experimental Physics (RFNC-VNIIEF) have been arrested for using lab supercomputing resources to mine crypto-currency, according to a report in Russia’s Interfax News Agency. Read more…

By Tiffany Trader

The Food Industry’s Next Journey — from Mars to Exascale

February 12, 2018

Global food producer and one of the world's leading chocolate companies Mars Inc. has a unique perspective on the impact that exascale computing will have on the food industry. Read more…

By Scott Gibson, Oak Ridge National Laboratory

Singularity HPC Container Start-Up – Sylabs – Emerges from Stealth

February 8, 2018

The driving force behind Singularity, the popular HPC container technology, is bringing the open source platform to the enterprise with the launch of a new vent Read more…

By George Leopold

Dell EMC Debuts PowerEdge Servers with AMD EPYC Chips

February 6, 2018

AMD notched another EPYC processor win today with Dell EMC’s introduction of three PowerEdge servers (R6415, R7415, and R7425) based on the EPYC 7000-series p Read more…

By John Russell

‘Next Generation’ Universe Simulation Is Most Advanced Yet

February 5, 2018

The research group that gave us the most detailed time-lapse simulation of the universe’s evolution in 2014, spanning 13.8 billion years of cosmic evolution, is back in the spotlight with an even more advanced cosmological model that is providing new insights into how black holes influence the distribution of dark matter, how heavy elements are produced and distributed, and where magnetic fields originate. Read more…

By Tiffany Trader

Inventor Claims to Have Solved Floating Point Error Problem

January 17, 2018

"The decades-old floating point error problem has been solved," proclaims a press release from inventor Alan Jorgensen. The computer scientist has filed for and Read more…

By Tiffany Trader

Japan Unveils Quantum Neural Network

November 22, 2017

The U.S. and China are leading the race toward productive quantum computing, but it's early enough that ultimate leadership is still something of an open questi Read more…

By Tiffany Trader

AMD Showcases Growing Portfolio of EPYC and Radeon-based Systems at SC17

November 13, 2017

AMD’s charge back into HPC and the datacenter is on full display at SC17. Having launched the EPYC processor line in June along with its MI25 GPU the focus he Read more…

By John Russell

Researchers Measure Impact of ‘Meltdown’ and ‘Spectre’ Patches on HPC Workloads

January 17, 2018

Computer scientists from the Center for Computational Research, State University of New York (SUNY), University at Buffalo have examined the effect of Meltdown Read more…

By Tiffany Trader

IBM Begins Power9 Rollout with Backing from DOE, Google

December 6, 2017

After over a year of buildup, IBM is unveiling its first Power9 system based on the same architecture as the Department of Energy CORAL supercomputers, Summit a Read more…

By Tiffany Trader

Nvidia Responds to Google TPU Benchmarking

April 10, 2017

Nvidia highlights strengths of its newest GPU silicon in response to Google's report on the performance and energy advantages of its custom tensor processor. Read more…

By Tiffany Trader

Fast Forward: Five HPC Predictions for 2018

December 21, 2017

What’s on your list of high (and low) lights for 2017? Volta 100’s arrival on the heels of the P100? Appearance, albeit late in the year, of IBM’s Power9? Read more…

By John Russell

Russian Nuclear Engineers Caught Cryptomining on Lab Supercomputer

February 12, 2018

Nuclear scientists working at the All-Russian Research Institute of Experimental Physics (RFNC-VNIIEF) have been arrested for using lab supercomputing resources to mine crypto-currency, according to a report in Russia’s Interfax News Agency. Read more…

By Tiffany Trader

Leading Solution Providers

Chip Flaws ‘Meltdown’ and ‘Spectre’ Loom Large

January 4, 2018

The HPC and wider tech community have been abuzz this week over the discovery of critical design flaws that impact virtually all contemporary microprocessors. T Read more…

By Tiffany Trader

Perspective: What Really Happened at SC17?

November 22, 2017

SC is over. Now comes the myriad of follow-ups. Inboxes are filled with templated emails from vendors and other exhibitors hoping to win a place in the post-SC thinking of booth visitors. Attendees of tutorials, workshops and other technical sessions will be inundated with requests for feedback. Read more…

By Andrew Jones

How Meltdown and Spectre Patches Will Affect HPC Workloads

January 10, 2018

There have been claims that the fixes for the Meltdown and Spectre security vulnerabilities, named the KPTI (aka KAISER) patches, are going to affect applicatio Read more…

By Rosemary Francis

GlobalFoundries, Ayar Labs Team Up to Commercialize Optical I/O

December 4, 2017

GlobalFoundries (GF) and Ayar Labs, a startup focused on using light, instead of electricity, to transfer data between chips, today announced they've entered in Read more…

By Tiffany Trader

Tensors Come of Age: Why the AI Revolution Will Help HPC

November 13, 2017

Thirty years ago, parallel computing was coming of age. A bitter battle began between stalwart vector computing supporters and advocates of various approaches to parallel computing. IBM skeptic Alan Karp, reacting to announcements of nCUBE’s 1024-microprocessor system and Thinking Machines’ 65,536-element array, made a public $100 wager that no one could get a parallel speedup of over 200 on real HPC workloads. Read more…

By John Gustafson & Lenore Mullin

Flipping the Flops and Reading the Top500 Tea Leaves

November 13, 2017

The 50th edition of the Top500 list, the biannual publication of the world’s fastest supercomputers based on public Linpack benchmarking results, was released Read more…

By Tiffany Trader

V100 Good but not Great on Select Deep Learning Aps, Says Xcelerit

November 27, 2017

Wringing optimum performance from hardware to accelerate deep learning applications is a challenge that often depends on the specific application in use. A benc Read more…

By John Russell

SC17: Singularity Preps Version 3.0, Nears 1M Containers Served Daily

November 1, 2017

Just a few months ago about half a million jobs were being run daily using Singularity containers, the LBNL-founded container platform intended for HPC. That wa Read more…

By John Russell

  • arrow
  • Click Here for More Headlines
  • arrow
Share This