**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in November-December 2016.**

A $650 million bid by Hewlett Packard Enterprise (HPE) for SimpliVity, a provider of software-defined, hyperconverged infrastructure, is in line with the vendor’s strategy to strengthen its position in the hyperconverged market, estimated to reach about $6 billion by 2020.

SimpliVity, based in Westborough, Mass., was founded in 2009 and is privately held. Its hyperconverged architecture is based on its OmniStack Data Virtualization Platform and OmniStack Accelerator Card. The company launched its first product in April 2013, which is sold exclusively through the channel.

“This transaction expands HPE’s software-defined capability and fits squarely within our strategy to make hybrid IT simple for customers,” said Meg Whitman, president and CEO, HPE. “More and more customers are looking for solutions that bring them secure, highly resilient, on-premises infrastructure at cloud economics. That’s exactly where we’re focused.”

According to HPE, the combined HPE and SimpliVity portfolio will offer a rich set of enterprise data services across hyperconverged, 3PAR storage, composable infrastructure and multi-cloud offerings. SimpliVity’s technology is expected to bring additional benefits to HPE’s hyperconverged portfolio, including:

“This move really helps HPE round out its HCI offering,” notes Terri McClure, senior analyst with Enterprise Strategy Group (ESG). “The HC 380 was (and is) a great fit for some of the classic early HCI use cases – remote and branch office or VDI – but the richer enterprise data services that SimpliVity offers, such as integrated data protection, disaster recovery, dedupe and compression, will give the HC380 an entrée into the data center. If HPE can really integrate OneView and SimpliVity OmniCube, it will create a compelling data-center offering in support of its hybrid cloud strategy,” she told us.

Both HPE and SimpliVity channel partners will continue with business as usual, HPE noted. The vendor will continue to offer its existing hyperconverged products, the HC 380 and the HC 250, to partners and customers. For SimpliVity customers and partners, there will be …

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… no immediate change in the product road map and HPE will continue to support existing SimpliVity customers and platforms.

However, 60 days after the transaction closes, HPE plans to offer the SimpliVity Omni Stack software qualified for its ProLiant DL380 servers. Looking further out to the second half of 2017, expect to see HPE offer a range of integrated HPE SimpliVity hyperconverged systems based on HPE ProLiant Servers.{ad}

“In the short term, there will be no changes to the hardware partner options so IT partners can continue to be platform-agnostic and remain flexible, independent advisers for client HCI requirements,” said Kevin Rhone, an ESG senior consultant and channel practice lead. “Longer term, this acquisition will help HPE-focused and loyal partners go head-to-head with competitors using simpler sales motions across the range of HPE HCI, 3PAR and hybrid cloud offerings.”

The transaction is expected to close in the second quarter of HPE’s fiscal year.