Meg Whitman

HP gets the chequebook out for Aruba

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Pictured: HP president & CEO Meg Whitman. Source: HP

3 March 2015

BillyBlogHP has made its first big acquisition since the ill-fated purchase of Autonomy in 2011, spending an estimated $3 billion on wireless networking vendor Aruba Networks. The acquisition is expected to flesh out HP’s networking business by giving it a much stronger presence in a growing and increasingly influential part of the overall networking equation. At the moment, Cisco is dominant in the WLAN market with 48% market share, ahead of Aruba in a very distant second place on 11%, Ruckus in third on just over 6% and HP in fourth on 5.8%.

The announcement comes just a week after HP’s networking business posted a sales drop of nearly 11% in its first quarter results. In a prepared statement, HP CEO Meg Whitman (pictured) said combining Aruba’s wireless mobility solutions with HP’s switching portfolio would enable HP to “offer the simplest, most secure networking solutions to help enterprises easily deploy next-generation mobile networks”.

Her counterpart at Aruba, Dominic Orr, stated: “Together with HP, we have a tremendous opportunity to become an even greater force in enterprise mobility and networking. This transaction brings together Aruba’s best-of-breed mobility hardware and software solutions with HP’s leading switching portfolio. In addition, Aruba’s channel partners will have the opportunity to expand their businesses with HP offerings.”

Ah yes, the channel. In a briefing note on the acquisition, Aruba had quite a lot to say on the subject. It argued HP’s global channel reach would allow the company “to significantly expand into the SME market”. More significantly for its existing partners, Aruba claimed: “One of the main reasons HP is acquiring Aruba is because of the unmatched expertise of our world-class partner community. HP understands how critical our partners have been to our success and is committed to extending and deepening those relationships.”

Among the other advantages for Aruba partners, it highlighted “HP’s go-to-market resources and ability to drive awareness of the Aruba brand and generate new customer demand for our partners”, access to a broader portfolio of networking products and the ability to use HP’s “higher-level strategic relationships to gain increased access to global corporations and large enterprises”.

This overlooks the fact that quite a few Aruba partners may have already looked at the potential benefits of selling HP networking products in the past and opted to ally with a rival vendor instead.

Rivals or partners?
In a blog post concerning the deal, Abby Strong, director of product marketing at Aruba rival Aerohive wrote: “Aruba had a relatively strong channel partner line up, but many of them already offer switches as part of their portfolios. Aruba channel partners may not be happy having to compete against the huge HP channel in products and services, as well as meeting the more stringent HP partnership requirements.”

She added, cheekily: “Past acquisitions like this have introduced us to some of our best channel partners.”

Matters are further complicated by the fact Aruba already has a number of relationships and OEM deals in place with HP rivals. It has been supplying OEM products to Alcatel-Lucent since 2005 and Dell since 2010. The latter, in particular, as a rival to HP on quite a few fronts may want to look at that Aruba relationship again.

In her blog post, Strong wrote: “I suspect the relationship with Dell will be the most volatile due to this recent announcement. Dell not only fights for switch business with HP, but it’s also spent a significant amount of money customising the Aruba OEM software to fit into its portfolio. Unless Dell and HP suddenly decide to become besties, this could result in some serious thrashing for customers who are waiting to see who will support their WLAN infrastructure solution.”

In addition, there’s a deal with Brocade announced in 2013. At that time, Brocade said it had chosen Aruba to achieve its “vision of the virtualised, software defined network” because it “needed a partner with similar goals in the enterprise mobility space”. And as recently as June last year, Aruba and Juniper announced a strategic agreement “to deliver open, converged wired and wireless network solutions based on best-of-breed technologies”. The partnership included joint development efforts and go-to-market collaboration, “with the goal of providing innovative solutions for the toughest problems facing enterprises”.

At the time, Juniper CEO Shaygan Kheradpir said the two companies would “jointly deliver a unique, interoperable wired and wireless solution that will enable customers to realise performance, cost, intelligence and simplified management benefits”. For his part, Aruba’s Orr claimed the joint development agreement “brings together the best in mobility technology with a leader in wired switching and routing”.

As they say: “That was then, this is now.” There’s still a deal bringing together Aruba’s “best-of-breed mobility hardware and software solutions”, it’s just with a different switching vendor that’s paid $3 billion for the privilege and put a spanner in the works for a number of its rivals in the process.

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