Infrastructure & Hardware
Quantum Computing
HPE buys supercomputer manufacturer, Cray, for $1.3 billion
HPE has found itself a partner in which to usher in the era of quantum computing, with the firm announcing its intention to acquire Cray, the firm best-known for having developed some of the world’s most powerful supercomputers, having held the top spot six times since 1976.
The deal to buy Cray is worth $1.3
billion, with the purchase price set at $35 a share, which is a $5.19 premium
over its closing price on Thursday. The deal is expected to close in HPE’s fiscal
Q1 2020, although it’ll be subject to regulatory oversight. We expect this won’t
be too much of an issue, however, given the already intense competition in the computing
industry.
What is Cray?
Cray began life in the 1970s and
gained notoriety in 1976 with the Cray-1, a supercomputer which boasted 160MFLOPS
of power. Sure, that pales in comparison to the supercomputers being built now,
but back then Cray’s computer was so powerful that it managed to sell more than
80 of them for $7.9 million a pop.
After the success of the Cray-1,
the company developed new supercomputers that surpassed the original and took
on the title of the world’s most powerful computer. That includes the Cray
X-MP, Cray-2, and Cray Y-MP, each one of which held that top spot between 1983
and 1989. In 1990, Cray lost its edge to competitors such as Fujitsu, NEC, TMC,
Intel, Hitachi and IBM, all of which produced more powerful computers than Cray.
At the same time, Cray was also being squeezed in the low-end of the high-performance
market, thanks to the launch of new mini-supercomputers.
It took Cray until 2009 to reclaim
the top spot, with the firm building the infamous Jaguar for the Oak Ridge
National Laboratory. This computer boasted 1.75 petaflops of power and was
performing important tasks for the US Department of Energy, solving problems in
areas such as climate modelling, renewable energy, seismology, and much more.
It still wasn’t quite powerful enough, however, and in 2012, the Oak Ridge
National Laboratory upgraded its supercomputer to the Cray Titan, a computer
boasting 17.59 petaflops of power, a tenfold increase.
That brings us to 2019. Titan is
no longer the most powerful supercomputer housed at the Oak Ridge National Laboratory
as it was eclipsed earlier this year by IBM’s Summit. That supercomputer offers
the Department of Energy 200 petaflops of power, and was key to the US
regaining its superiority in the race for more powerful computers, having lost out
in the rankings to China for five years.
That doesn’t mean Cray wasn’t
still seen as a leader in the high-performance computing field, with the firm
already developing its first exascale computer for the very same laboratory.
This computer, dubbed ‘Frontier’, should reach peak performance of greater than
1.5 exaflops when it’s operational in 2021.
Why has Cray agreed to an acquisition by HPE?
Cray is still building some of the
world’s most powerful supercomputers, having been the developer of more than 49
of the top 500 supercomputers in the world. Despite this, the company is haemorrhaging
cash; it has made significant losses in every quarter since 2017, and while it
showed signs of improvement, it was still losing millions.
What does HPE want with Cray?
In the list of the top 500
supercomputer manufacturers, Cray may have produced 49, but HPE isn’t all that
far behind, having produced 45. Despite having built only four less than Cray,
HPE’s supercomputers boast notably lower performance when compared to those offered
by Cray. In fact, that’s one of the key reasons HPE is buying the company.
Cray has amassed a vast array of IP
and patents that will help HPE in the transition to quantum computing. That’s
seen as the next big frontier in computing, as quantum computers are designed
to perform operations much more quickly and use less energy in the process.
Cray has already dipped its feet into the market, although it faces stiff
competition from the likes of Google and IBM – the latter of which announced
the first commercial quantum computer for use outside of the lab earlier this
year.
Given the steep competition in
quantum computing, HPE needs all the firepower it can get in order to compete,
and $1.3 billion is a small price to pay for Cray.
Jordan O'brien - 17 May 2019