HPE acquires Cray for $1.3 billion

The acquisition of the supercomputer giant signals a more focused approach to HPE's high-performance computing arm

The global supercomputer mammoth Cray has been bought by Hewlett Packard Enterprise (HPE) today for $1.3 billion in cash, with a view for the company to expand into the academic and government computing markets.

HPE bought Cray at $35 per share, a marked increase in valuation compared to its closing price yesterday of $29.81 and the HPE hopes that the acquisition will help the company make new discoveries in data.

"Answers to some of society's most pressing challenges are buried in massive amounts of data," said Antonio Neri, president and CEO at 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," he added. "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 already has a foot in the door in the high-performance computing (HPC) market with its hardware used by research institutions and universities for processing simulation models and crunching huge datasets.

Some might say this was a savvy acquisition on HPE's behalf; one that could prove to be a significant power boost in the HPC arm of its business.

The announcement also alluded to a future supercomputer as a service delivered by HPE that would also support AI and machine learning analytics through HPE Greenlake. It forms one of the new revenue growth opportunities that the partnership would enable alongside the hunt for command over the academic and government sectors.

Cray recently won a $600 million Exascale government contract with the US Department of Energy's Oak Ridge National Laboratory to undertake "groundbreaking" AI research with a system that's targeted as the world's fastest.

The supercomputing firm was also the first, along with Intel, to win a government Exascale contract for the U.S. Department of Energy's Argonne National Laboratory worth in the region of $100 million.

"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 at Cray.

The deal is the first billion-dollar one struck under new CEO Neri since the takeover from Meg Whitman who stepped down in February 2018. HPE said there are huge economic benefits to be realised from the acquisition that will aim to deliver enhanced supply chain capabilities leveraging US-based manufacturing.

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