In August, Hewlett Packard Enterprise (HPE) announced its acquisition of Silicon Graphics International (SGI) in a deal valued at $275 million, or $7.75 per share. In taking on the server and high-performance computer maker, HPE saw long-term growth in the high-performance computing (HPC) industry, which is why it saved SGI from a decade of turmoil that including Chapter 11 in 2009 and a sale of Rackable the same year.  

As HPE integrates the Silicon Valley-based data analytics and data management company’s over 1,000 employees, it hopes to gain more than just an additional $500 million in annual revenues. HPE strategically took on a major player in the HPC segment, which is expected to grow at a compound annual growth rate (CAGR) of 6% to 8%, according to the International Data Corp. (See also: Cheap Tech Stock Pick: Hewlett Packard Enterprise.)

Demand for Big Data Increases

As more companies have access to massive amount of data, they seek out solutions to manage and analyze the information in order to make business decisions. As big data dominates, demand for high-end computing systems will continue to grow past its current estimated size of $11 billion.

 

After HPE’s acquisition, SGI’s CEO and President Jorge Titinger said in a statement, “Our HPC and high-performance data technologies and analytic capabilities, based on a 30+ year legacy of innovation, complement HPE’s industry-leading enterprise solutions. This combination addresses today’s complex business problems that require applying data analytics and tools to securely process vast amounts of data.”

As HPE continues to slim down core businesses, it has chosen to hone in on the HPC market. The deal, which is expected to close in fiscal Q1 2017, should propel HPE ahead as an increasing number of both private and public-sector enterprises seek supercomputer installations. (See also: HP Enterprise Secures $8.8 Billion Deal.)

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