The global hybrid cloud partnership announced this month between industry giants HPE and Nutanix is being called a marriage of two market leaders, providing both companies with an added opportunity to become better positioned to take on the competition.  Both companies already hold impressive market shares for their respective solutions, so what does this new partnership mean? 

One obvious area of focus of this new strategic partnership appears to take aim squarely at Dell EMC and VMware's market share in servers and hyperconverged infrastructure.

Yes, HPE works with multiple hypervisors, and they have supported and helped sell VMware virtualization technology since the beginning.  But VMblog raised this very question back when Dell EMC became the majority stake holder of VMware, would HPE continue adding value into its biggest competitor, indirectly or not?  This latest HPE partnership is keen to provide customers with what it calls an alternative method of saving money by reducing licensing costs with Nutanix's no-charge Acropolis hypervisor (AHV).  A hypervisor that, as they put it, is lightweight, fast, well suited to VMs and containers, and easy to deploy.

HPE is already a well-established leader in data center solutions and an early advocate of hybrid IT; but now they are adding Nutanix to its GreenLake pay-as-you-go managed service ecosystem.  Nutanix's fast-growing Enterpise Cloud software stack will be integrated with the secure and reliable servers of HPE.

Additionally, the partnership between these two vendors will create a new line of integrated appliances that will allow partners to sell HPE ProLiant and Apollo servers with Nutanix's Enterprise Cloud OS software installed on top, enabling customers to purchase a fully integrated, turnkey HPE-Nutanix solution, shipping directly from HPE factories.

Both companies see the partnership as a way to cater to customer requests for more choice.  Expect to see both companies become bolder with regard to that messaging around "more choice" in the near future.

The combined offering promises customers significant lower total cost of ownership.  According to a Nutanix commissioned IDC research on Nutanix hyperconverged software, customers will achieve a 60 percent reduction in the five-year cost of operations.  According to a HPE commissioned Forrester report on the total economic impact of HPE GreenLake, customers will benefit from a 30 percent CAPEX savings due to eliminated need for over-provisioning, and a 90 percent reduction in support and professional services costs.

While HPE and Nutanix and Dell EMC and VMware may be the big dogs in this hunt, they certainly aren't alone.  And while the cross hairs of this partnership may seem to be strategically lined up, others in this industry are taking notice.

"As the hybrid cloud market evolves, all eyes are on how legacy providers are adapting to the changing needs of customers.  HPE’s partnership with Nutanix is clearly meant as a counterpoint to Dell/EMC and their relationship with VMware, but it confuses the market about their seriousness to support customers with continued investment in its strategy for ProLiant servers and SimpliVity HCI – just as these native offerings were starting to re-emerge in the market," explained Bruce Milne, CMO of Pivot3.  "All HCI vendors will require the ability to manage both on premises and public cloud; it would appear that HPE’s response to that is to invest in a different HCI vendor’s solutions. 

And Milne brings up another valid point, adding, "It further appears that HPE could be looking down-market to compete more aggressively with VMware, although Microsoft will quickly dominate the open source-type models for commoditized deployments.  In my mind, this reinforces that HPE thinks of themselves as primarily a hardware vendor/ODM."

Milne explained to VMblog that Pivot3 was engineered for mission-critical deployments that need security, resilience and manageability at scale, a type of deployment that benefits from mature hypervisors like VMware.  And he went on to say, "As the market continues to evolve, we’re positioned well for the emerging needs of customers as their requirements expand to deployments that span across core, cloud and edge."

Meanwhile, the Nutanix Enterprise Cloud OS software on HPE GreenLake and the integrated appliance utilizing Nutanix software on HPE servers are expected to be available in Calendar Q3 2019.

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