HPE to acquire supercomputer maker Cray in $1.3bn deal

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Hewlett Packard Enterprise has announced that it will acquire supercomputer maker Cray for $35 per share in cash in a deal valued at approximately $1.3bn.

HPE's President and CEO, Antonio Neri explained how the acquisition will help drive the next generation of high performance computing (HPC), saying:

“Answers to some of society’s most pressing challenges are buried in massive amounts of data. 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. 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.” 

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HPE expects the deal to increase its footprint in federal business and academia while also providing it with the means to sell supercomputing products to its commercial clients.

Growth of HPC

The explosion of data from AI, ML and big data analytics coupled with evolving customer needs for data-intensive workloads are currently driving a significant expansion in HPC. Over the next three years the HPC market is expected to grow from $28bn in 2018 to $35bn in 2021.

Exascale is a growing segment within HPC and over $4bn of Exascale opportunities are expected to be awarded over the next five years.

The combination of HPE and Cray will deliver significant customer benefits including future HPC-as-a-Service and AI and ML analytics through HPE Green Lake.

The deal is expected to close by the first quarter of HPE's fiscal year 2020 following regulatory approval and HPE will incur one-time integration costs that will be absorbed within its fiscal year 2020 free cash flow outlook of $1.9bn to $2.1bn that remains unchanged.

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