Hewlett Packard Enterprise (HPE) recently announced that it is acquiring supercomputer company Cray for $35 per share in cash as part of a deal valued at $1.3 billion. HPE is expecting this deal to drive some of its business in the federal and academic sectors.
And it provides HPE with the capabilities of offering supercomputing products for its clients. Since artificial intelligence, machine learning, and analytics require intensive data workloads, the high-performance computing market is expected to be valued at well above $30 billion by 2021. This deal is expected to close by Q1 of HPE’s fiscal year 2020 pending regulatory approvals.
“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,” said HPE’s President and CEO Antonio Neri in a statement.
Combined, HPE and Cray will also deliver significant customer benefits like future HPC-as-a-Service and AI and ML analytics via HPE GreenLake. Plus the combined companies will capitalize on the growing HPC segment of the market and Exascale opportunities.
“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,” added Cray president and CEO Peter Ungaro. “HPE and Cray share a commitment to customer-centric innovation and a vision to create the global leader for the future of high-performance computing and AI. On behalf of the Cray Board of Directors, we are pleased to have reached an agreement that we believe maximizes value and are excited for the opportunities that this unique combination will create for both our employees and our customers.”
Cray launched in 1972 and was highlighted in “Jurassic Park” when author Michael Crichton wrote that four Cray X-MP supercomputers were powering the DNA sequencers in the fictitious park for bringing dinosaurs back to life. And several Cray computers were in the background of the 1993 film adaption of the novel. Originally, Cray was based out of Chippewa Falls, Wisconsin and it was founded by Seymour Cray — who is known as “the father of supercomputing.”
Now Cray is headquartered in Seattle and has about 1,300 employees worldwide. In the most recent fiscal year, Cray reported $456 million in revenue. And Cray recently announced it is working with AMD for building a new supercomputer for the Department of Energy, which can make a quintillion calculations per second.
About 80% of Cray’s revenue came from government contracts, according to Business Insider. And Cray often times outbid HPE for those contracts.
