HPE buys supercomputer manufacturer, Cray, for $1.3 billion
Author: Jordan O'brien
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.
