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HP is buying up Aruba Networks to strengthen its WLAN expertise

HP is buying up Aruba Networks to strengthen its WLAN expertise

HP said it plans to buy wireless networking gear specialist Aruba Networks for roughly $3bn in a move aimed at bolster the enterprise tech firm’s wireless networking expertise.

The deal will see HP pay Aruba $24.67 per share, totalling roughly $3bn – or $2.7bn when discounted for debt, and will HP a strong contender in enterprise networking.

The 1,800-person company, which competes with Barracuda, Fortinet and Palo Alto Networks among others, claimed $729m in fiscal 2014 and reported 30 per cent compound annual revenue growth over the past five years.

Just last week, in a discussion on the company’s Q2 2015 results Aruba chief executive David Orr told analysts and journalists Aruba is the fastest growing business on a year-on-year basis in the enterprise wireless market, and that the transition to the 802.11ac standard combined with the emergence of the all-wireless workplace and the proliferation of mobile devices will further expand the enterprise wireless LAN market.

In that same discussion Orr explicitly declined to comment on speculation HP was preparing to acquire the firm.

“Enterprises are facing a mobile-first world and are looking for solutions that help them transition legacy investments to the new style of IT,” said Meg Whitman, chairman, president and chief executive officer of HP. “By combining Aruba’s world-class wireless mobility solutions with HP’s leading switching portfolio, HP will offer the simplest, most secure networking solutions to help enterprises easily deploy next-generation mobile networks.”

The deal will effectively see Aruba become HP Enterprise’s networking organisation, with Aruba’s chief executive Dominic Orr and chief strategy and technology officer Keerti Melkote reporting to Antonio Neri, leader of the HP Enterprise Group.

“Together with HP, we have a tremendous opportunity to become an even greater force in enterprise mobility and networking,” Orr said. “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.”

The acquisition will also give HP, which since its divorce continues to see flat topline revenues, a high-growth enterprise hardware business. HP is struggling to generate quarterly growth beyond the mid-single digit range, and still sees declines in its hardware business and services as it moves to a more cloud-centric model.