HPE-SGI to Tackle Exascale and Enterprise Targets

By John Russell

November 22, 2016

At first blush, and maybe second blush too, Hewlett Packard Enterprise’s (HPE) purchase of SGI seems like an unambiguous win-win. SGI’s advanced shared memory technology, its popular UV product line (HANA), deep vertical market expertise, and services-led go-to-market capability all give HPE a leg up in its drive to remake itself. Bear in mind HPE came into existence just a year ago with the split of Hewlett-Packard. The computer landscape, including HPC, is shifting with still unclear consequences. One wonders who’s next on the deal block following Dell’s recent merger with EMC.

Few details of HPE plans for SGI (product roadmap, etc.) are available. At SC16 HPE was busy getting at least one message out – it is delighted for the new resources and high-end HPC headroom provided by SGI. “It’s a strategic move on our part to bolster our position in the HPC market as well as in the big data and mission critical systems spaces. [SGI has] lots of technologies across high performance data analytics (HPDA) and real time transaction processing in addition to HPC especially at the very high-end,” said Vineeth Ram, VP, HPC, Big Data & IoT Segment, HPE Servers, during a briefing at SC.

There’s still plenty to sort out. One issue that may prove troublesome is SGI’s preexisting reseller arrangements with Dell EMC, now a direct competitor, and Cisco, for the SGI’s UV Hanna machines. Some staff rightsizing may also be necessary. Yet on paper what’s most eye-catching is the deal’s complementary rather than overlapping quality.

Vineeth Ram, HPE
Vineeth Ram, HPE

More details will be provided in the opening half of 2017, said Ram. Job one, perhaps predictably, is connecting the two sales teams and reassuring customers, said Ram, “If you think about product roadmap and [what] our strategy is, we will continue investing in all the capabilities and are committed to supporting our existing offerings across our portfolios. We want to make sure customers investments are protected, we want to make sure we take that into account as we define the roadmaps.”

The deal itself (see HPCwire article, HPE Gobbles SGI for Larger Slice of $11B HPC Pie) was for about $275M and 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. There was plenty to covet for HPE. Ram noted, “HPE had consciously made our strategy more of a mid-end approach and then start making a foray into the higher end. SGI’s history has been very much at the high end.”

When the acquisition formally closed three weeks ago, SGI became part of HPE’s infrastructure group, headed by Antonio Neri, executive vice president and general manager. It’s noteworthy that Bill Mannel, a long-time SGI exec, moved to HP roughly a year ahead of the HP split-up, and is now vice president and GM of High-Performance Computing and Big Data for HPE. He should know the SGI organization and portfolio as well as anyone and will likely play a role in guiding incorporation of SGI into the HPE fold.

idc-hpe-marketshare-sc16In its annual HPC market update at SC, IDC still pegged HPE as the market share leader in HPC servers by a nearly 2x advantage over Dell EMC (see IDC chart taken from its SC16 Update and read HPCwire article, IDC: AI, HPDA Driving HPC into High Growth Markets, for more); Dell EMC disputes that leadership assertion suggesting that now its combined revenues with EMC push it to top. Bragging rights aside, HPE was chasing more than a revenue bump and new products, said Ram. SGI’s go-to-market strategy, sales channels, and vertical segment (industry and geography) expertise were at least as important.

Here are four (of many) important benefits SGI brings according to Ram:

  • Verticals. SGI is particularly strong in life sciences, government, climate simulation, and manufacturing, for example, which all represent HPE opportunities. “Even in spaces like manufacturing, where we have been playing, I think we have been playing at the slightly lower end and SGI has come in at the higher end,” said Ram. SGI has built up tremendous domain expertise in these areas as well, he said.
  • Services. A fair amount of SGI business is created by its services and integration capabilities – a departure from HPE’s somewhat more product-led strategy. Ram noted SGI’s extensive end-to-end approach spans everything from the hardware to software stacks and applications. It’s not the HPE doesn’t have these capabilities, he said, but it is true SGI leverages and leads with them.
  • Japan. Cracking the Japanese market is historically difficult. Reliance on Japanese manufacturers is high. Contrarily, SGI is one of few U.S.-based computer companies that have fared well there, to a significant degree leveraging deep systems integration capabilities there, said Ram.
  • U.S. Manufacturing. This is no doubt an important element of SGI’s strength in selling to the U.S. government, and perhaps likely to become more important under the new Administration and if the National Strategic Computing Initiative gathers steam.

Like virtually all HPC server suppliers, HPE has been singing the ‘purpose-built’ chorus and the SGI acquisition doesn’t change that at all. It does elevate the target landscape HPE can attack. “They have domain expertise, deep vertical expertise, and solutions folks who can actually bring their super computer capability and drive it across the enterprise,” said RAM.

SGI UV croppedOne of the more interesting aspects to the acquisitions to watch will be HPE’s highest-end strategy. HP/HPE has for some time touted its leadership on the Top500 in terms of number of machines placed; that said, none of the top ten, for example, are HP/HPE systems. Mannel in an earlier interview and Ram at SC both emphasized HPE’s determination to penetrate the top end more effectively.

SGI technology should help this aspiration. For example an SGI ICE-X machine at energy giant Total was eleventh on the June 2016 Top500 (~5 Pflops) and dropped to 16 on the most recent list. Another SGI machine (SGI ICE XA, Cheyenne at the National Center for Atmospheric Research was 20th on the most recent list and a third SGI machine was 27th.

Ram calls the addition of SGI expertise exciting and said HPE was “absolutely” planning to play in the big sandbox including competing in big government procurement cycles leading towards exascale.

“I can say we are going to engage in bigger projects and longer term development with some of the uniqueness that we are bringing together. You will see us make some public statements early next year to talk about some of the kinds of exascale capabilities that we are driving, so we are definitely committed to investing and being part of the whole exascale evolution,” said Ram, hinting that HPE was already engaged in government projects but couldn’t able to elaborate until later in 2017.

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