HPE will take on Nutanix and Cisco with hyperconverged system

HPE will launch the product later this month, CEO Meg Whitman said

HPE will take on Nutanix and Cisco with hyperconverged system

Meg Whitman, president and CEO of Hewlett Packard Enterprise, outside the New York Stock Exchange on Nov. 2, 2015

Credit: Eric Draper/HP Enterprise

Hewlett Packard Enterprise will enter the fast-growing but crowded market for hyperconverged systems with a new product that it plans to unveil this month.

CEO Meg Whitman spilled the beans on the product during HPE's quarterly earnings call Thursday. She took aim at Nutanix, one of the startups that pioneered the category.

"Later this month, we’ll announce a new, market-changing hyperconverged offering based on our Proliant virtualization server," Whitman said. "Our new solution will offer customers installation in minutes, a consumer-inspired, simple, mobile-ready user experience, and automated IT operations -- all at 20 percent lower cost than Nutanix."

Hyperconverged systems combine storage, compute, and networking functions in a single product that's often sold as an appliance. As the name suggests, they're an evolution of converged systems but with components that are more tightly coupled.

Converged systems, like VCE's Vblocks, tend to be higher-end products customized for particular workloads at large enterprises. Hyperconverged systems have found traction at midsize companies and tend to cost less and use less customization.

Research firm IDC says they became popular for running virtual desktops but have expanded to support other workloads. IDC expects the hyperconverged market to grow by 60 percent per year through 2019, reaching nearly $4 billion in sales.

That explains why HPE is rushing to get on board, but it's far from alone. Just this week, Cisco said it will enter the market too, with a product co-developed with Springpath.

Admitting that the field is already "pretty crowded," Whitman said HPE developed its product in record time. She didn't give a ship date, however, and it's not yet known when HPE's hyperconverged system will arrive.

Nutanix seems to be enjoying all the attention. "It’s been an exciting two weeks, with the entire IT establishment turning their attention toward Nutanix while validating that hyperconverged infrastructure is the new reality of the data center," its president,  Sudheesh Nair, said in a statement.

"Winning the enterprise cloud market requires sustained innovation and commitment to customer value -- not just competing on price alone," he said.

The hyperconverged system was one of two products Whitman preannounced Thursday, and she didn't give many details about the other one, either. It's a new server technology that HPE calls "persistent memory," which will allow servers to make wider use of non-volatile memory such as flash.

"Also later this month, we will refresh our server portfolio to include a new, game-changing technology called persistent memory, which was invented by our server group," Whitman said.

"This new technology will enable an ecosystem of new applications supporting non-volatile memory, and it's a key milestone on our journey to the Machine."

That last reference is to a brand new computer architecture from HP Labs that the company first talked about nearly two years ago. It's promised a prototype later this year.

Also Thursday, HPE reported financial results for its first full quarter as an independent company. It split from HP's PC and printer business last year.

HPE's revenue was $12.7 billion, down 3 percent from last year, while profit fell 50 percent to $267 million, the company said. The profit drop was due mainly to costs from the separation.

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