HP Enterprise Acquires Nimble Storage for All Flash Arrays

HP Enterprise (HPE) has acquired Nimble Storage (NMBL) for $1.09 billion. It's HPE's latest move to jumpstart its data center business, where traditional network, server and storage revenues face intense pressure from cloud and hyperconverged infrastructure (HCI) rivals.

Nimble Storage specializes in All Flash Array (AFA) storage, a fast-growing market segment. The company has also pushed hard into so-called Nimble Cloud Volumes -- an enterprise-grade multicloud block storage service for Amazon Web Services (AWS) and Microsoft Azure.

No doubt, Nimble has a strong growth story for HPE shareholders, customers and partners. The company's  Q4 revenues were $117 million -- up 30% from the corresponding quarter the previous year.

Still, HPE is paying a huge 45 percent premium to acquire Nimble. The premium reflects Nimble's value as a growth engine plus HPE's own struggle to push beyond traditional IT infrastructure. HP Enterprise's own revenues shrank in the company's most recent quarter amid competitive pressures.

Meg Whitman's HPE Makeover

CEO Meg Whitman has been working overtime to transform HPE's revenue mix. In addition to the Nimble deal, HPE acquired SimpliVity for HCI capabilities earlier this year. Also, the company has spun off its IT services business (merging it with CSC) and portions of its software business (merging it with Micro Focus).

Among Whitman's remaining challenges: Introducing more recurring revenue-type products for the evolving IT partner ecosystem, while also jumpstarting HPE's engagements with SMB partners.