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What was a rumour yesterday is now being confirmed by the two HPC manufacturers: HPE is taking over Cray. Together they will become the second largest party in the Top 500 list of supercomputers. In total, HPE pays $1.3 billion for Cray.

This morning the news broke through that HPE and Cray would be in advanced talks about a possible takeover. What was then quoted by an anonymous source is now confirmed by both parties. HPE takes over Cray immediately for $1.3 billion.

Cray exists since 1972 and is named after founder Seymour Cray. Cray still builds supercomputers, but is less known today than in the first decades of computer history. The Cray-1 and Cray-2 were in their time among the most powerful supercomputers in the world. Even today, Cray Inc. still lives up to that history. Several systems from the Top 500 of the world’s most powerful supercomputers were built by the company. Today, Cray does this earlier as an integrator, using hardware from Intel and Nvidia, among others.

Position amplification

In the most recent ranking we see Cray for the first time in place 5 with a Cray XC50 system based on Intel Xeon E5-2690v3-cpus and Nvidia Tesla P100 gpu accelerators. Other Cray systems can be found in 6th, 9th, 12th and 13th place. The most powerful system built by HPE itself is for comparison only in 15th place. Although HPE is many times larger in the server country, Cray is clearly the niche specialist here.

HPE hopes to strengthen its position in the high performance computing market with the acquisition of Cray. The expertise seems to be the main motivation for the acquisitions, as Cray Inc. is not a profitable company at the moment. The latest quarterly results show a turnover of 72 million dollars and a net loss of 29 million dollars.

The HPC market is currently estimated at 28 billion dollars and is expected to continue to grow by 9 percent annually to 35 billion dollars in 2021. Exascale is one of the growing segments with more than $4 billion in opportunities over the next five years. Cray recently won an exascale project for the U.S. Department of Energys Oak Ridge National Laboratory worth 600 million euros according to HPE.

HPC as an essential component

HPC is an essential component in the vision and growth of HPE according to CEO Antonio Neri. He sees the acquisition of Cray growth opportunities within exascale, federal government, academies and new options within AI, machine learning and HPC-as-a-service with HPE GreenLake. The move is likely to be a blow to the company against IBM’s ambitions, and certainly to Lenovo, which has been making a furore with its HPC efforts in recent years since it took over IBM’s x86 server branch in 2014.

In the Top 500 list of most powerful HPC systems, Lenovo dominates with 28 percent, followed by Inspur (17.2 percent), Sugon (11.4 percent), Cray (9.8 percent) and HPE (9 percent). When Cray and HPE join forces, they suddenly become the second largest name in the Top 500 list. According to Raf Peeters, Managing Director Belux at HPE, the Top 500 list was not a priority at the end of April. With the acquisition of Cray, this could change in the future.

Related: HPE is fifty shades of grey between on-premises and public cloud

This news article was automatically translated from Dutch to give Techzine.eu a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.