HOUSTON - Hewlett Packard Enterprise (NYSE: NYSE:HPE) has announced an agreement to acquire Morpheus Data, a leader in hybrid cloud management and platform operations. This move is set to enhance HPE's GreenLake cloud services by adding multicloud automation, orchestration, and FinOps capabilities for cloud cost optimization.
The acquisition is positioned to solidify HPE as the first vendor to offer a comprehensive suite of enterprise-grade capabilities across the hybrid cloud stack, aiming to simplify IT operations for its customers. Morpheus Data's technology will complement HPE's existing services, including those from its previous acquisition of OpsRamp, by providing multi-vendor, multicloud application provisioning and lifecycle management.
Fidelma Russo, executive vice president and general manager, hybrid cloud and CTO at HPE, emphasized the need for a unified platform that can simplify IT complexity and accelerate innovation, whether in public or private cloud infrastructures. She noted that Morpheus Data's integration into HPE GreenLake would be a significant step towards establishing the platform as the go-to destination for managing hybrid IT workloads.
The acquisition is expected to close in the fourth quarter of the HPE 2024 fiscal year, subject to customary closing conditions. Morpheus Data's offerings will be integrated into the HPE GreenLake cloud and HPE's private cloud portfolio and will continue to be available as standalone software. HPE has committed to supporting existing customers and partnerships.
Brian Wheeler, co-founder and CEO of Morpheus Data, expressed confidence in the combined capabilities of the two companies to help customers navigate the complex and fragmented IT landscape.
The announcement comes as the intelligent cloud operations market is projected to reach $36 billion by 2027, according to IDC. HPE GreenLake's evolution with Morpheus Data's technology is expected to provide enterprises with the tools needed to manage applications seamlessly and optimize cloud costs across different environments.
This article is based on a press release statement from Hewlett Packard Enterprise.
In other recent news, Hewlett Packard Enterprise (HPE) has expanded its AI-powered networking portfolio with new security features, including behavioral analytics for network detection and response, and extended Zero Trust Network Access capabilities. The European Union Commission has also approved HPE's acquisition of Juniper Networks (NYSE:JNPR), valued at $14 billion, marking a significant step in HPE's expansion into the networking equipment industry. However, Juniper Networks reported a revenue shortfall in Q2, with earnings falling short of analysts' forecasts. In response to these developments, BofA Securities has raised its price target for HPE shares, maintaining a neutral rating.
These developments follow HPE's recent unveiling of the HPE Private Cloud AI, a product aimed at simplifying AI adoption for enterprises, and the launch of a comprehensive AI enablement program in collaboration with NVIDIA (NASDAQ:NVDA). HPE Aruba Networking Central and HPE Aruba Networking SSE (LON:SSE) will be featured at the upcoming Black Hat USA 2024 event, highlighting their comprehensive approach to cyber threat protection.
These are the recent developments investors should consider. The acquisition of Juniper Networks is still under review by the United Kingdom's antitrust authority, with a decision expected soon. As the landscape of AI-powered services continues to evolve, these moves by HPE signal a strategic effort to remain competitive and innovative in the face of changing industry dynamics.
InvestingPro Insights
Hewlett Packard Enterprise's strategic acquisition of Morpheus Data aligns with its financial health and market position, as reflected in recent data and analysis from InvestingPro. The company's market capitalization stands at a robust $23.11 billion, indicating a strong presence in the industry.
InvestingPro Tips highlight that HPE is trading at a low P/E ratio relative to near-term earnings growth, with the adjusted P/E ratio for the last twelve months as of Q2 2024 at 10.97. This suggests that the company's stock may be undervalued given its earnings potential, which could be an attractive point for investors considering the stock amidst this acquisition news.
Additionally, HPE's valuation implies a strong free cash flow yield, an important metric for investors as it can signal a company's ability to generate cash and potentially return it to shareholders. This financial strength could provide HPE with the flexibility to pursue strategic initiatives like the acquisition of Morpheus Data.
From a performance standpoint, HPE has shown resilience with a dividend yield of 2.92% and has maintained dividend payments for 10 consecutive years, reinforcing its commitment to shareholder returns. This consistency in dividends complements the company's status as a prominent player in the Technology Hardware, Storage & Peripherals industry.
InvestingPro also provides further insights, with a total of 7 additional tips available on the InvestingPro platform for those interested in a deeper dive into HPE's financial metrics and market performance.
In summary, HPE's acquisition of Morpheus Data is backed by a solid financial foundation and a favorable market valuation, which may enhance investor confidence in the company's growth trajectory and its ability to capitalize on opportunities in the hybrid cloud market.
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