Hewlett-Packard Enterprise acquires supercomputer maker Cray for $1.3B

39;Jurassic Park's' DNA sequencing was conducted on Cray computers

39;Jurassic Park's' DNA sequencing was conducted on Cray computers

Cray is a global technology leader in supercomputing and shares our deep commitment to innovation.

Hewlett Packard Enterprise Co. on Friday said it would buy Cray Inc., a supercomputer company with roots and a sizable office in the Twin Cities, for $1.3 billion.

The company predicts that the market for data services and storage from areas such as artificial intelligence is expected to grow from $28bn a year ago to $35bn by 2021.

"Cray is a global technology leader in supercomputing and shares our deep commitment to innovation", said Antonio Neri, president and chief executive of HPE.

The explosion of data from AI, ML and big data analytics coupled with evolving customer needs for data-intensive workloads are now driving a significant expansion in HPC.

HPE and Cray didn't immediately respond to requests for comment.

The main focus of HPE so far has been selling servers to data center customers, but with the acquisition of Cray, HPE is setting its eyes on the higher-end supercomputing market, too.

Exascale is a growing segment within HPC and over $4bn of Exascale opportunities are expected to be awarded over the next five years. The company just recently announced an Exascale supercomputer contract for more than $600 million for the US Department of Energy's Oak Ridge National Laboratory. Their first product, the Cray-1 supercomputer, was an instant success, paving the way for Cray to become a major player in the supercomputer industry over the next several decades.

The acquisition will enable HPE to "drive the next generation of high performance computing and play an important part in advancing the way people live and work", said Neri.

HPE said the combination with Cray is meant to deliver "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".

HPE also said expects to incur one-time integration costs that will be absorbed within its fiscal year 2020 free cash flow outlook of $1.9 billion to $2.1 billion. 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.