So per IDC, HPE was statistically tied for the #2 spot in the External Storage Array market in Q3 ’16, with $549M in sales vs $650M the prior year’s Q3. That’s quite a downward trend. Included in that number are the multiple storage offerings that HP owns: 3PAR, LeftHand, its own arrays, etc.
Today we find out that HPE has paid $1.09B for a company that has total revenues of around $500M, was losing money at a rate of around $10M per quarter, and had no appreciable market share in the external array market. Nimble made its initial bet on hybrid flash architecture, which became a problem as the market moved to all-flash. Nimble changed course and provided all-flash, but many other vendors were far ahead here.
So what gives? How can Nimble fit into a long-term strategy for HP?
Nimble isn’t really part of a hyperconverged play, so in the context of the recent Simplvity acquisition, this seems a parallel move.
There’s InfoSight, which provides predictive analytics and ease of management for Nimble Arrays; perhaps HP sees a platform it can expand to its enterprise customers. But a BILLION dollars for that??
Nimble has a lot of small customers (over 10,000 at this point based on a recent press release), but 10,000 customers is a pittance compared to HP’s existing customer base across all customer sizes.
In the short term, this acquisition will bump up HP into the #2 spot alone in external arrays, but not by much, and given the current trajectory of their external storage array revenue, it’s likely they won’t hold that spot for long.
When you consider this acquisition from all the angles (and I’m sure I’m missing some and welcome the discussion), I struggle to make sense of this acquisition from HPE’s standpoint. I only see cannibalization of existing storage business, disruption of the storage sales organization, and no added value to HPE’s overall storage offering. Did HPE simply have $1B lying around with nothing better to do with it? Guys, call ME next time.