Hewlett Packard Enterprise has announced its intention to acquire Plexxi, a small software-defined networking company, for an undisclosed amount. Plexxi provides flexible software-defined networking fabric capabilities for HCI and cloud applications.
HPE, in announcing the acquisition, specifically called out the benefit that Plexxi’s capabilities in software-defined and flexible networking will bring to HPE's Simplivity and Synergy solutions.
While there will be an immediate benefit to those product lines for HPE, this acquisition is far more strategic in nature. Converged and composable infrastructure are evolving at a rapid rate. Partnerships only work up to a point. The technology providers who have the right balance of capabilities in their IP portfolios will be the ones best suited to evolve with the needs of their customers.
HPE is closing a fundamental capability gap with the Plexxi acquisition. It's timed well, arriving just as Nutanix announces their software-defined networking solution with Nutnix Flow, and VMware doubles down on NXP. It’s a good acquisition and is happening at a critical time.
HPE and Composable and Hyperconverged Infrastructure
Convergence offers the dream of a data center capable of being dynamically reconfigured while also being managed through a single manageability interface. Storage, compute and networking all become fungible, allowing IT to deploy workloads where they make the most sense. Racks can be reconfigured on the fly to adapt to shifting demands.
As the technology evolves, cloud increasingly becomes an essential element of the converged infrastructure vision. It is the epitome of software-defined everything.
HPE established this vision early on, working to build a strong footprint in the market. HPE built a converged technology stack from the top-down, leveraging its long history in manageability software with HPE OneView into a complete software stack aimed at turning HPE hardware into flexible infrastructure. HPE named its solution Synergy.
HPE’s Synergy is a composable infrastructure that combines software-defined storage and virtualized compute software with a broad range of HPE-engineered hardware into a single management domain. Synergy supports an extensive variety hardware from HPE’s portfolio, allowing a customer the flexibility to choose the infrastructure pieces that make the most sense for their workloads. The choice of underlying server and storage technology also provides the critical capability of allowing resources to be scaled independently of each other.
Not every workload requires a full stack composable infrastructure solution. Nutanix understood this and surprised the industry with the overwhelming success of its HCI appliance. Nutanix currently dominates the HCI market. Dell EMC, IBM, and Lenovo have all adopted and sell quite a bit of Nutanix product.
HPE could have followed its competitors in bundling Nutanix software, but it recognized that such an approach has intrinsic downsides. Relying on Nutanix for its HCI solution could lead to an undifferentiated offering. More critically, relying on Nutanix would limit the flexibility to marry HCI and Synergy into a cohesive whole.
HPE closed its HCI gap with the acquisition of Simplivity in January 2017. Those who focus on market share will tell you that HPE Simplivity is growing, but that it still significantly lags its competition. It may never catch up. I don't believe that matters.
The long-game in delivering solutions into the enterprise datacenter is not measured in quarterly HCI market share, but rather in a technology provider's ability to adapt and differentiate in a software-defined world. HPE understands that very well.
When HPE identifies a gap, it closes that gap, very often with an acquisition. HPE identified a hole in its converged portfolio and is addressing it by acquiring the HCI software-defined networking company Plexxi.
The ability to manage and dynamically reconfigure the underlying networking fabric is critical to a converged infrastructure solution. While HPE has a strong portfolio of server and storage technology, it often relies on partners to provide the right technology for software-defined networking.
One of these partners, Plexxi, has been working over the past decade to deliver a software-defined networking solution that provides an HCI-like ability to manage and configure fabrics. Plexxi targets the HCI market but also has stand-alone and cloud-focused offerings.
A partner-centric approach isn’t a bad strategy, especially in the converged infrastructure space. Dell EMC and Nutanix have historically taken the same path. Plexxi has solutions for Nutanix and VMWare converged solutions. By all accounts, these are successful partnerships.
What's changing is that convergence and hyper-convergence are in the midst of redefinition. The vision of a software-defined data center is rapidly becoming one of a software-defined enterprise, inclusive of on-premise and cloud-based resources. IT has seen the promise of convergence, and IT is demanding those capabilities for all of their operations. The ability to deliver solutions of that complexity requires in-house capabilities. Partnerships become less attractive in such a world.
The industry is paying attention. Nutanix announced just last week a software-defined networking solution called Nutnix Flow, the result of recent acquisitions. Dell EMC is leveraging VMWare's NSX technology into their vxRail and vxBlock solutions.
HPE responded to this new dynamic by acquiring Plexxi, giving it a healthy portfolio from which it can deliver its composable infrastructure vision. Given that Plexxi already has solutions integrated into Simplivity, Plexxi can be immediately leveraged into HPE solution sales. It’s a good acquisition.
It’s just getting started
The technology underpinning the converged data center is rapidly evolving. Like many evolving technologies, the most exciting work is happening in start-ups and other emerging companies. New acquisitions will occur as the winners become apparent.
Over just the past 18 months, HPE has bought Nimble Storage, Simplivity, and now Plexxi. HPE says that it was drawn to Nimble Storage not just for its storage solutions, but also its InfoSight predictive analytics platform. Nimble Storage is an enterprise platform that has removed storage complexity, in large part because of its InfoSight predictive analytics platform.
HPE continues to add InfoSight capability to its infrastructure offerings across the board to further the vision of an autonomous datacenter, a vital element of any composable infrastructure play.
HPE targeted Plexxi for its HCI software-defined networking capabilities. It has other products, which will undoubtedly find their way into HPE's overall portfolio, but convergence is the driver in all of these cases.
HPE is playing the long-game with its acquisition strategy. HPE understand the powerful benefit that composable infrastructure can deliver and that winners will emerge from those who can best adapt the technologies they own and control.
HPE is far from alone. Nutanix is painting a vision of an unparalleled ability to treat all infrastructure as fungible. Nutanix is pursuing both targeted acquisitions and dedicated engineering efforts to bring that vision to fruition.
Dell EMC, the market leader in convergence with its vxRail offering. It already has all of the piece-parts required and is aggressively going after the rack-scale converged market. Dell EMC is a formidable competitor.
In these early days, it is difficult to say which technology provider will ultimately win the convergence war. There are many battles to come. Acquisitions like Plexxi are the right strategic moves, but we're just getting started.
Flexible software-defined infrastructure will change the face of IT over the next generation. Whichever vendors end up dominating, IT organizations will ultimately benefit. It's exciting to watch.