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HPE buys HPC specialist SGI for $275m

HPE targets high-performance computing with $275m SGI purchase

Hewlett Packard Enterprises (HPE) is to buy high-performance computing (HPC) company SGI in a deal valuing the company at $275m.

SGI, which used to be known as Silicon Graphics, started life specialising in high-end workstations for design and animation. However, with that market taken over by high-end PCs and graphic cards, the company shifted into producing servers for high-performance computing.

In recent years, it has focused on providing hardware and services to government and big business to help them tackle their big data and analytic challenges. The company posted revenues of $533m for 2016.

There is an increasing expectation that HPC will move beyond these high-level users, though, and become more widespread as the amount of data businesses generate grows, and the need to analyse it at speed becomes more pressing.

As such, Antonio Neri, executive vice president and general manager, Enterprise Group, Hewlett Packard Enterprise, said having SGI's high-level HPC capabilities within its product offerings would be a huge boost for the business.

"At HPE, we are focused on empowering data-driven organisations," he said.

"SGI's innovative technologies and services, including its best-in-class big data analytics and high-performance computing solutions, complement HPE's proven data centre solutions designed to create business insight and accelerate time to value for customers."

The CEO of SGI, Jorge Titinger, said that for SGI and its products, the move into HPE would help it reach more customers worldwide.

"The computing power that our solutions deliver can interpret this data to give customers quicker and more actionable insights," he said.

"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."

While SGI has touted the deal as a positive for the company, the selling price of $7.75 a share is significantly down on its 2013 high of almost $20, which may annoy a few shareholders who would have wanted the company to grow again before selling itself.

The deal is expected to be closed in the first quarter of HPE's 2017 fiscal year.

The move comes amid rumours HPE is looking to sell some of its software assets, including Autonomy, which the firm would no doubt he happy to see the back of after all the trouble the deal has caused.

HPE buys HPC specialist SGI for $275m

HPE targets high-performance computing with $275m SGI purchase

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