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AI M&A: HPE Acquires Pachyderm for ML Pipeline Expertise

PALO ALTO, CALIFORNIA – OCTOBER 04: The Hewlett Packard (HP) logo is displayed in front of the office complex on October 04, 2019 in Palo Alto, California. HP announced plans to cut 7,000 to 9,000 jobs in an effort to save about $1 billion by the end of fiscal 2022. (Photo by Justin Sullivan/Getty Images)

Hewlett Packard Enterprise (HPE) has acquired open source machine learning (ML) pipeline automation startup Pachyderm. Financial terms of the deal were not disclosed, but HPE said the transaction is not subject to any regulatory approvals and is expected to close this month.

This is technology M&A deal number 17 that ChannelE2E has covered so far in 2023. See more than 2,000 technology M&A deals involving MSPs, MSSPs & IT service providers listed here.

HPE Expands AI Portfolio With Pachyderm Acquisition

Pachyderm, founded in 2014, is based in San Francisco, California. The company has 55 employees listed on LinkedIn. Pachyderm’s areas of expertise include machine learning, artificial intelligence, MLOps, data engineering, data science, AI, data versioning, data lineage, data pipelines and DataOps.

HPE will integrate Pachyderm’s software with its existing supercomputing and AI solutions to automate reproducible machine learning pipelines for large-scale AI applications, the company said.

Reproducing a machine learning pipeline enables the use of the same dataset to achieve the same results each time to increase transparency, trustworthiness and accuracy in predictions. It is critical to successful AI-at-scale initiatives, and HPE is betting that demand these technologies will increase along with the need to build and train larger machine learning models that require a high volume of complex data.

Justin Hotard, EVP and GM, HPC and AI, HPE

Justin Hotard, executive vice president and general manager, HPC and AI, at HPE, commented on the news:

“As AI projects become larger and increasingly involve complex data sets, data scientists will need reproducible AI solutions to efficiently maximize their machine learning initiatives, optimize their infrastructure cost, and ensure data is reliable and safe no matter where they are in their AI journey. Pachyderm’s unique reproducible AI software augments HPE’s existing AI-at-scale offerings to automate and accelerate AI and unlock greater opportunities in image, video, and text analysis, generative AI, and other emerging large-language-model needs to realize transformative outcomes.”

Popular use cases involving natural language processing, computer vision and video and image processing that are growing across industries such as transportation, life sciences, defense, financial services and manufacturing, HPE said.

This acquisition builds on HPE’s February 2022 investment in Pachyderm through its venture capital arm, Hewlett Packard Pathfinder, to speed time-to-market for AI innovation at lower data processing and operating costs. Pachyderm’s software currently integrates with HPE’s existing supercomputing and AI software solutions. Additionally, HPE plans to integrate Pachyderm with upcoming versions of the HPE Machine Learning Development System, a turnkey solution for building and deploying AI models, the company said.

HPE's HPC, Cloud and AI/ML Push

HPE of late has focused on its GreenLake cloud data platform, expanding to support Microsoft Azure Stack HCI and Microsoft SQL Server database; forming cloud services groups to extend its hybrid cloud as-a-service business model and acquiring Zerto to help its SMB MSP partners deliver cloud data protection services.

The move into AI and machine learning solutions makes sense in this context; AI and machine learning-enabled solutions align with HPE's HPC and GreenLake managed services strategy. In 2021, Hewlett Packard Enterprise acquired Determined AI, an open source machine learning (ML) platform.

Overall, HPE’s business appears to be performing reasonably well, though the rumored acquisition of Nutanix never took shape. HPE’s revenue was $7.9 billion in Q4 of 2022, up 7% from the corresponding quarter last year, the company ($HPE) disclosed on November 29. The revenue figures represented a company record, HPE said.

HPE had cash on hand of $4.45 billion as of July 2022, according to MarketWatch, and the company’s overall valuation is $19.8 billion as of December 1, 2022.