Composability and Continuous Delivery Accelerate Business Initiatives and Deliver a Competitive Advantage. Photo courtesy of HPE

San Jose, Calif., and Seattle, Wash., USA - May 17, 2019

Hewlett Packard Enterprise (NYSE: HPE) and Cray Inc. (Nasdaq: CRAY), a global supercomputer leader, today announced that the companies have entered into a definitive agreement under which HPE will acquire Cray for USD35.00 per share in cash, in a transaction valued at approximately USD1.3 billion, net of cash.

Photo courtesy of Cray

Combined Company Will Drive Next Generation of High Performance Computing

• Accelerates HPE’s strategy to tackle customers’ most data-intensive challenges by combining deep supercomputing talent and cutting-edge technologies

• Establishes the most comprehensive end-to-end portfolio across compute, storage, interconnect, software and services in the fast growing High Performance Computing and Artificial Intelligence segments

• Creates opportunity for significant economic upside through enhanced growth and profitability

Antonio Neri is the President and Chief Executive Officer of Hewlett Packard Enterprise, and is responsible for the development and delivery of enterprise technology solutions and services that make Hybrid IT simple and power the Intelligent Edge. Photo courtesy of HPE

“Answers to some of society’s most pressing challenges are buried in massive amounts of data,” said Antonio Neri, President and CEO, HPE.
“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.”

Hewlett Packard Enterprise to acquire supercomputing leader Cray. Photo courtesy of HPE

The Explosion of Data is Driving Strong HPC Growth

The explosion of data from artificial intelligence, machine learning, and big data analytics and evolving customer needs for data-intensive workloads are driving a significant expansion in HPC.

Over the next three years the HPC segment of the market and associated storage and services is expected to grow from approximately $28 billion in 2018 to approximately $35 billion in 2021, a compound annual growth rate [Source: Market data as of October 5, 2018] of approximately 9 percent.

Photo courtesy of Cray

Exascale is a growing segment of overall HPC opportunities and more than $4 billion of Exascale opportunities are expected to be awarded over the next five years.

Addressing complex challenges and advancing critical academic research, including predicting future weather patterns, delivering breakthrough medical discoveries, and preventing cyber-attacks, requires significant computational capabilities, up to and through Exascale level architecture.

Exascale capable systems enable solutions to these problems with much greater precision and insight.

Peter Ungaro, President and CEO of Cray. Photo courtesy of Cray

“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,” said Peter Ungaro, President and CEO of Cray.
“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.”

Today marks a significant milestone in our Company’s history, as we have signed a definitive agreement to be acquired by Hewlett Packard Enterprise (HPE). Photo courtesy of Cray

Cray is a Leading Innovator in Supercomputer Solutions

Cray is the premier provider of high-end supercomputing solutions that address customers’ most challenging, data-intensive workloads for making critical decisions.

Cray has a leadership position in the top 100 supercomputer installations around the globe.

With a history tying back to Cray Research, which was founded in 1972, Cray is headquartered in Seattle, Washington, with US-based manufacturing, and approximately 1,300 employees worldwide. 

Cray’s supercomputing systems, delivered through their current generation XC and CS platforms, and next-generation Shasta series platform, have the ability to handle massive data sets, converged modeling, simulation, AI, and analytics workloads. Photo courtesy of Cray

The company delivered revenue of $456 million in its most recent fiscal year, up 16 percent year over year.

Cray’s supercomputing systems, delivered through their current generation XC and CS platforms, and next-generation Shasta series platform, have the ability to handle massive data sets, converged modeling, simulation, AI, and analytics workloads.

Photo courtesy of Cray

In addition to supercomputers, they offer high-performance storage, low-latency high performance HPC interconnects, a full HPC system software stack and programming environment, data analytics, and AI solutions – all currently delivered through integrated systems.

Shasta and Slingshot Supercomputing Technologies. Today’s science, technology and big data questions are bigger, more complex and more urgent than ever. Answering them demands an entirely new approach to scientific computing. These massive workloads require computing performance capable of handling billions of calculations per second. Introducing Cray's next-generation supercomputer, code-named Shasta. Shasta systems are designed to support multiple exascale workloads simultaneously, providing the power you need for advanced simulation, modeling, AI and analytics. And with Shasta comes Slingshot, the scalable, high-speed, purpose-built supercomputing interconnect that ingests data efficiently from outside the system then moves it efficiently inside. Photo courtesy of Cray

Cray recently announced an Exascale supercomputer contract for over $600 million for the U.S. Department of Energy’s Oak Ridge National Laboratory.

The system, which is targeted to be the world’s fastest system, will enable groundbreaking research and AI at unprecedented scale, using Cray’s new Shasta system architecture and Slingshot interconnect.

Shasta and Slingshot Supercomputing Technologies. Photo courtesy of Cray

The company was also part of an award with Intel for the first U.S. Exascale contract from the U.S. Department of Energy’s Argonne National Laboratory, with Cray’s portion of the contract valued at over $100 million.

Photo courtesy of Cray

Cray Strengthens and Expands HPE’s High Performance Computing Portfolio

High performance computing is a key component of HPE’s vision and growth strategy and the company currently offers world-class HPC solutions, including HPE Apollo and SGI, to customers worldwide.

This portfolio will be further strengthened by leveraging Cray’s foundational technologies and adding complementary solutions.

Shasta and Slingshot Supercomputing Technologies. Photo courtesy of Cray

The combined company will also reach a broader set of end markets, offering enterprise, academic and government customers a broad range of solutions and deep expertise to solve their most complex problems.

Together, HPE and Cray will have enhanced opportunities for growth and the integrated platform, scale and resources to lead the Exascale era of high performance computing.

Hewlett Packard Enterprise extends composable strategy with new capabilities to accelerate customer innovation. Photo courtesy of HPE

The combination of HPE and Cray is expected to deliver significant customer benefits including:

• Future HPC-as-a-Service and AI / ML analytics through HPE GreenLake

• A comprehensive end-to-end portfolio of HPC infrastructure – compute, high-performance storage, system interconnects, software and services supplementing existing HPE capabilities to address the full spectrum of customers’ data-intensive needs

• Differentiated next-generation technology addressing data intensive workloads

• Increased innovation and technological leadership from leveraging greater scale, combined talent and expanded technology capabilities

• Enhanced supply chain capabilities leveraging US-based manufacturing

Customers looking to decrease waste and up-front investments, and to free their IT team to do more business-focused work, can rely on HPE GreenLake. Photo courtesy of HPE

Significant Economic Upside Expected to be Realized from the Combination

Bringing together HPE and Cray enables an enhanced financial profile for the combined company that includes several revenue growth opportunities and cost synergies.

The companies expect the combination to drive significant revenue growth opportunities by:

• Capitalizing on the growing HPC segment of the market and Exascale opportunities

• Enhancing HPE’s customer base with a complementary footprint in federal business and academia and the company’s ability to accelerate commercial supercomputing adoption

• Introducing new offerings in AI / ML and HPC-as-a-service with HPE GreenLake

We also expect to deliver significant cost synergies through efficiencies and by leveraging proprietary Cray technology, like the Slingshot interconnect, to lower costs and improve product performance.

Accelerate app deployment with containers-as-a-service, enhanced visibility and governance from HPE OneSphere. Photo courtesy of HPE

Transaction Details

As a result of the enhanced financial profiles of the combined companies, the deal is expected to be accretive to HPE non-GAAP operating profit and earnings in the first full year following the close.

As part of the transaction, HPE expects to incur one-time integration costs that will be absorbed within HPE’s FY20 free cash flow outlook of $1.9B to $2.1B that remains unchanged.

The transaction is expected to close by the first quarter of HPE’s fiscal year 2020, subject to regulatory approvals and other customary closing conditions.

From Kubernetes to Docker HPE OneSphere is supercharging cloud application development. Photo courtesy of HPE

HPE Q2 FY19 Earnings Announcement

As a reminder, Hewlett Packard Enterprise (NYSE: HPE) will conduct a live audio webcast of its conference call to review its financial results for the second quarter of fiscal 2019, which ended April 30, 2019.

The call is scheduled for Thursday, May 23, at 4:30 p.m. ET / 1:30 p.m. PT, and the webcast will be available at
www.hpe.com/investor/2019Q2Webcast  

HPE announces six months paid parental leave, additional employee benefits at HQ grand opening. Photo courtesy of HPE

About Hewlett Packard Enterprise

Hewlett Packard Enterprise is a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze and act upon data seamlessly from edge to cloud.


HPE enables customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future.


About Cray

Cray Inc. (Nasdaq: CRAY) combines computation and creativity so visionaries can keep asking questions that challenge the limits of possibility. 


Drawing on more than 45 years of experience, Cray develops the world’s most advanced supercomputers, pushing the boundaries of performance, efficiency and scalability.

Cray continues to innovate today at the convergence of data and discovery, offering a comprehensive portfolio of supercomputers, high-performance storage, data analytics and artificial intelligence solutions.

Go to  www.Cray.com  for more information.

Photo courtesy of Cray

Press Contacts

HPE

Editorial contact
Kate Holderness, HPE
Email: Kate.holderness@hpe.com  

Investor Relations contact
Andrew Simanek, HPE
Email: Investor.relations@hpe.com  


Cray

Editorial contact
Diana Brodskiy, Bhava Communications for Cray
Email: Cray@bhava.com  
415-306-6199

Investor Relations contact
Paul Hiemstra, Cray
Email:  ir@CRAY.com  
206-701-2044

Photo courtesy of Cray

Sources:

Hewlett Packard Enterprise

https://www.hpe.com/us/en/newsroom.html  

Cray

https://www.cray.com/  

https://www.cray.com/company/news-and-media/hpe  



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