HPE buys Plexxi to expand its hybrid cloud solutions

Just days after Google announced that it would acquire Velostrata to help customers migrating more of their operations into cloud environments, HPE under its new CEO Antonio Neri is also upping its game in the same department. Today the company announced that it would acquire Plexxi, a specialist in software-defined data center solutions, aimed at optimising application performance for enterprises that are using hybrid cloud environments.

A spokesperson confirmed that the companies are not currently revealing the terms of the deal, which is expected to close in the third quarter of 2018 (ending July 31). Plexxi has 100 employees and all will be joining HPE, a spokesperson said. A role for Rich Napolitano, Plexxi’s CEO who joined after having been the president of EMC, “is still being finalized.”

For some context and a possible price range for this deal, Plexxi, founded in 2010, was last valued at around $267 million as of its last financing round, more than two years ago in January 2016, according to PitchBook. And the previous cloud infrastructure acquisition HPE made, of SimpliVity over a year ago, was for $650 million. Plexxi’s investors included GV (formerly Google Ventures), Lightspeed Venture Partners, Matrix and more.

Cloud services — propelled by the rise of mobile hardware with less on-device storage, advances at major platforms like AWS, Microsoft’s Azure and Google, and the rise of companies like Box to help manage cloud services — have exploded in their ubiquity as a way to deliver and store software and data among enterprises.

But many organizations are, in fact, not throwing all of their eggs into the clouds, so to speak, and are taking a more gradual path to migrate some or all of their IP out of on-premises-based solutions.

This, in turn, has given rise to a second market for hybrid cloud services, deployments that are more flexible and allow for a mix of legacy and on-premises hardware alongside more modern distributed architectures. HPE and Google are not the only ones building solutions to address that market: Microsoft, Dell, Accenture, NTT, and many more have also made large investments to cover these different bases.

And that has proven popular not just with vendors — but with enterprises as well. BCC today released a report that estimates hybrid cloud services could reach a market size of $98.8 billion globally by 2022.

Ric Lewis, the VP & GM of HPE’s software-defined and cloud group, said that the plan will be to integrate Plexxi into HPE’s existing products in two areas.

The first of these is in the company’s hyperconverged solutions business, where HPE’s acquisition of SimpliVity also sites. “Plexxi will enable us to deliver the industry’s only hyperconverged offering that incorporates compute, storage and data fabric networking into a single solution, with a single management interface and support,” he wrote in a blog post.

The second of these will be to bring Plexxi’s HCN tech to HPE Synergy and its composable infrastructure business. This, Lewis explained, is “a new category of infrastructure that delivers fluid pools of storage and compute resources that can be composed and recomposed as business needs dictate.” Plexxi will enable this approach to extend also to rack-based solutions in private clouds.

“Plexxi and HPE’s values and vision for the future are closely aligned,” Plexxi CEO Rich Napolitano wrote in his own announcement. “We share the same mission, to help the enterprise effectively leverage modern IT to accelerate their business in the digital age.”

While the two wait for the deal to close, it seems to be business as usual for Plexxi. Just earlier today, the company announced an expansion of its integrations with VMware.

Updated with more detail from Plexxi.

 

Veridium Labs teams with IBM and Stellar on carbon credit blockchain

Veridium Labs has been trying to solve a hard problem about how to trade carbon offset credits in an open market. The trouble is that more complex credits don’t have a simple value like a stock, and there hasn’t been a formula to determine their individual value. That has made accounting for them and selling them on open exchanges difficult or impossible. It’s a problem Veridium believes they can finally solve with tokens and the blockchain.

This week the company announced a partnership with IBM to sell carbon offset tokens on the Stellar blockchain. Each company has a role here with Veridium setting up the structure and determining the value formula. Stellar acts as the digital ledger for the transactions and IBM will handle the nuts and bolts of the trade activity of buying, selling and managing the tokens.

Todd Lemons, chairman at Veridium Labs, which is part of a larger environmental company called EnVision Corporation, says that even companies with the best of intentions have struggled with how to account for the complex carbon credits. There are simpler offset credits that are sold on exchanges, but ones that seek to measure the impact of a product through the entire supply chain are much more difficult to determine.  As one example, how does a company making a candy bar source its cocoa and sugar. It’s not always easy to determine through a web of suppliers and sellers.

Moving forward

To partly solve this problem, another Envision company, InfiniteEARTH developed a way to account for them called the Redd+ forest carbon accounting methodology. It is widely accepted to the point that it has been incorporated in the Paris Climate Agreement, but it doesn’t provide a way to turn the credits into what are called fungible assets, that is an easily tradable one. The problem is the value of a given credit shifts according to the overall environmental impact of producing a good and getting it to market. That value can change according to the product.

Jared Klee, blockchain manager for token initiatives at IBM, says that buying and accounting for Redd+ credits on the company balance sheet has been a huge challenge for organizations. “It’s a major pain point. Today Redd+ credits are over the counter assets and there is no central exchange,” he said. That means they are essentially one-off transactions and the company is forced to hold these assets on the books with no easy way to account for their actual value. That often results in a big loss, he says, and companies are looking for ways to comply in a more cost-efficient way.

Putting it together

The three companies — Veridium, IBM and Stellar — have come together to solve this problem by creating a digital token that acts as a layer on top of the carbon credit to give it a value and make it easier to account for. In addition, the tokens can be bought and sold on the blockchain.

The blockchain provides all the usual advantages of a decentralized record keeping system, immutable records and encrypted transactions.

Veridium is working on the underlying formula for token valuation that measures “carbon density per dollar times product group,” Lemons explained. “That can be coded into a token and carried out automatically,” he added. They are working with various world bodies like the United Nations and The World Resource Institute to help figure out the values for each product group.

All of the details are still being worked out as the idea works its way through the various regulatory bodies, but the companies hope to be making the tokens available for sale some time later this year.

Ultimately this is about finding ways to help businesses comply with environmental initiatives and remove some of the complexity inherent in that process today. “We hope the tokens will provide less friction and a much higher adoption rate,” Lemons said.

10 Tuesday AM Reads

My Two-for-Tuesday morning train reads: • Study: For Hedge Funds, Smaller Is Better (Institutional Investor) see also Size, Age, and the Performance Life Cycle of Hedge Funds (SSRN) • 18 Chart Crimes and Misdemeanors (CFA Institute) • China’s superfast bullet trains: what it’s like to ride, photos, tour (Business Insider) • White House leakers leak about leaking (Axios) see also Trump vs. the “Deep State”…

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