HPE SimpliVity Hit By Layoffs, ‘Unifying’ Hyperconverged R&D

‘Unifying our R&D strategy for both HPE Nimble Storage dHCI and HCI will allow customers to benefit from a consistent and better experience across hybrid cloud, AIOps, support, automation, and lifecycle management for all of their HCI use cases,’ HPE says to CRN. “As part of this plan, there will be a reduction in the HPE HCI headcount.”

Hewlett Packard Enterprise has laid off a significant number of its original SimpliVity development team as part of a move to “accelerate innovation” by unifying hyperconverged research and development across SimpliVity and Nimble Storage dHCI, CRN has discovered.

“Unifying our R&D strategy for both HPE Nimble Storage dHCI and HCI (hyperconverged infrastructure) will allow customers to benefit from a consistent and better experience across hybrid cloud, AIOps, support, automation, and lifecycle management for all of their HCI use cases,” said HPE in a statement provided to CRN. “As part of this plan, there will be a reduction in the HPE HCI headcount, but we’re not disclosing the number of impacted team members.”

HPE Simplivity development team members were informed of the cutbacks in a conference call on July 13 with HPE Vice President and General Manager Hyperconverged Infrastructure Patrick Osborne and HPE Vice President of Hyper-Converged Engineering Joshua Dion, sources told CRN.

[Related: The 10 Hottest Hyperconverged Infrastructure Systems]

The layoffs directly impacted a significant portion of the HPE SimpliVity development team at the Westborough, Mass.-based office – the one-time headquarters for SimpliVity before it was acquired by HPE in 2017 for $650 million, sources said.

As to whether the Westborough, Mass office will be closed, HPE said that it is “continually evaluating” its “real estate site strategy.”

The layoffs are set to take effect July 24, sources said.

“We were told there was a restructuring and WFR (workforce reduction),” said one longtime SimpliVity employee, who did not want to be identified that was on the call. “We were told it was due to COVID-19 and if you are on the call you are part of the WFR.”

HPE is moving some Simplivity support and development to Bangalore, India, sources told CRN. HPE declined to comment on the matter.

HPE said its unified hyperconverged infrastructure plan comes as the company is moving quickly to “capitalize on key areas of market growth” as customers increasingly moving to edge platforms and disaggregated HCI.

“Organizations are now looking to expand the HCI experience to new use cases – including edge environments, business-critical applications, and mixed-workloads at scale - driving a need to evolve HCI to meet two new needs: Edge-Optimized HCI and Disaggregated HCI,” said HPE.

With HPE “concentrating” hyperconverged resources, the company said it is “re-aligning its HCI strategy to focus HPE SimpliVity for general purpose, small and medium-sized businesses, as well as the enterprise edge, and the HPE Nimble Storage dHCI solution for enterprises’ and mid-market businesses’ disaggregated HCI needs for business-critical applications and mixed workloads at scale.”

Michael Maher, director of professional services at, N.J.-based Clinton CPP Associates, which was recently named HPE solution provider of the year, said the combined HPE edge optimized and disaggregated hyperconverged strategy is spot on as to the future of hyperconverged market.

“Edge optimized and disaggregated HCI takes the HPE cloud experience into the future,” he said. “It’s a natural progression of hyperconverged infrastructure in a connected anywhere, always-on world. HPE arguably has the most complete hyperconverged portfolio in the market, addressing data center to edge needs and scalability needs without increased complexity or cost. There are no real competitors that provide that kind of flexibility in the HCI market.”

The cutbacks come a little more than three years after HPE paid $650 million for the one-time hyperconverged upstart that attracted widespread attention for its robust backup and disaster recovery capabilities. After the deal closed, HPE maintained the Westborough, Mass. location and retained the SimpliVity development team.

HPE SimpliVity and Nimble dHCI, which are both 100 percent channel sales offerings, have been hot sellers for partners who are seeing strong growth in the hyperconverged market. The HPE hyperconverged business is a $1 billion-plus business.

Patrick Shelley, senior solutions architect for PKA, one of HPE’s original Platinum partners, said SimpliVity provides customers a better return on investment than offerings from Dell VMware with VXRail and Nutanix.

“SimpliVity has everything built in – a single box that takes care of all your compute, storage and backup requirements whereas VXRail and Nutanix need an ISV or backup appliance,” said Shelley. “That’s more software and hardware for customers to manage. Simplivity has one management interface all in one box. It is truly everything you need in one box. It is one pane of glass, easy to manage and all in one box. It is simple. That’s why customers love it.”

The integrated backup and disaster recovery generally provides a savings of 25 percent to 30 percent versus competitive offerings, said Shelley. “With SimpliVity you don’t need another appliance for backup,” he said. “That is what sets SimpliVity apart. It is all in one box. All you need is SimpliVity.”

HPE generated a total of $119 million in hyperconverged systems revenue during the first quarter of 2020, up 43 percent year over year, according to market researcher IDC. The growth allowed the company to capture 6 percent share of the global hyperconverged market, up from 4.5 percent market share in the first quarter of 2019. HPE trailed both Nutanix with 13.1 percent share in the quarter and Dell with 33.6 percent market share, according to IDC.

HPE also recently doubled the number of virtual desktops supported per node from 300 to 600 by arming its SimpliVity 325 Gen 10 hyperconverged server with the AMD EPYC Rome processor.The processor – which features up to 64 cores- is also powering a 50 percent lower cost per virtual desktop.

The development cutbacks come with SimpliVity embarking on an aggressive multiyear containerization development effort centered around Kubernetes and bare metal servers, said one software developer who is being layed off.

Another source told CRN that the SimpliVity and Nimble dHCI roadmaps include robust new offerings for the edge market with bright prospects for partners.

Simplivity and Nimble dHCI are both red-hot channel products, the source said. “They are both a big part of the future,” said the source. “This is about rationalizing the product line because there are products that cross multiple segments and workloads.”

In fact, the SimpliVity development plan includes a new 1U offering and StoreOnce integration, the source said. There is also a strong development road map for Nimble dHCI which has provided customers with the ability to get benefits of hyperconverged environments where storage and compute can be scaled independently.

In May, the HPE board of directors approved a three-year “Cost Optimization and Prioritization Plan” aimed at delivering gross savings of $1 billion with changes to its workforce, real estate model and business processes.

In the most recent quarter, HPE sales were down 16 percent compared with the year ago quarter with a backlog of $1.5 billion in orders as a result of supply chain constraints and order delays in the wake of the COVID 19 pandemic.

One source, who did not want to be identified, called the layoff of a larger number of the original SimpliVity developers the end of an era for the one-time hyperconverged high flyer.

“It was a really great development team,” said a software developer, who did not want to be identified. “I have done this for many years and these were some of the best people I have ever worked with. They were all top notch in their field. We did agile development which was one of the things HPE really liked about the SimpliVity team. There was an amazing esprit de corps. We trained a lot of HPE employees on how to do agile development.”

Additional reporting by Steven Burke