Hewlett Packard Enterprise Co. has expressed interest in acquiring Nutanix Inc., Bloomberg reported today.

Shares of Nutanix, which makes software for managing information technology infrastructure, jumped more than 8% on the news. 

HPE’s acquisition talks with Nutanix have reportedly been “on and off.” Additionally, today’s report stated that it’s unclear whether HPE and Nutanix will succeed in agreeing upon an acquisition price.

Nutanix has a market capitalization of more than $7 billion, which suggests that any potential acquisition would carry a significant price tag. And Dave Vellante, chief analyst at SiliconANGLE sister market research firm Wikibon, said that “if HPE is going to drop $7 billion-plus there might be some other considerations in terms of where to invest.”

According to today’s report, Nutanix may eventually decide against a sale and instead opt to continue operating as an independent company. Alternatively, it’s believed that Nutanix may seek a bid from another potential buyer besides HPE.

The development comes less than two months after reports first emerged that Nutanix is considering a sale. At the time, it was reported that a sale to a private equity firm may also be on the table. 

San Jose, California-based Nutanix sells software products that organizations use to manage their IT infrastructure. The company’s software can run on both cloud and on-premises infrastructure. In on-premises environments, Nutanix software is commonly installed on hyperconverged appliances, which package compute, storage and network equipment into a single chassis to ease maintenance.

Besides the infrastructure management market, Nutanix also competes in a number of adjacent markets. It provides a database management service called Era and offers multiple cybersecurity features. Additionally, Nutanix sells a Kubernetes distribution that includes automation tools and other capabilities not included in the open-source version. 

Acquiring Nutanix could enable HPE to expand the software capabilities of its GreenLake platform. GreenLake, HPE’s flagship offering, enables customers to purchase on-premises data center infrastructure from the company on a pay-as-you-go basis. HPE also installs and manages the infrastructure on customers’ behalf.

HPE’s revenue grew 7% year-over-year, to $7.9 billion, last quarter. The company easily topped analysts’ consensus sales estimate of $7.4 billion. HPE’s Intelligent Edge revenue segment, which includes a part of the revenue it generates from the GreenLake platform, increased sales by 18% year-over-year. 

Nutanix also topped analyst expectations during its most recent quarter. The company significantly narrowed its net loss to $99.1 million from $419.9 million a year earlier and grew revenues by 15%, to $433.6 million, during the same time frame. Nutanix added 530 new customers in the quarter. 

In 2019, HPE partnered with Nutanix to make core components of the latter company’s software portfolio available through its GreenLake infrastructure platform. Last year, the companies expanded the partnership to include Nutanix’s Era database management software. HPE combined Era with its popular ProLiant series of servers and made the bundle available as a service for GreenLake customers. 

Photo: Nutanix