Exciting news on the acquisition front as HPE announces plan to acquire SD-WAN provider Silver Peak for $925 Million.
This is quite an interesting move that sees HPE (arguably rightly so) doubling down on its networking business to ensure it can stay competitive in offices against the encroachment of companies like Cisco Meraki and Fortinet into the Branch and Wi-Fi areas.
From our discussions with service providers over the past year, whilst the names you would expect to hear such as VeloCloud and Cisco were raised often, Silver Peak also featured in discussions of movers and shakers in the market. Aruba, however, aside from their own marketing, did not come up as often in our industry investigations.
It was our perspective that whilst Aruba had strong branch, edge, Wi-Fi, and IoT management technology, it was lacking on the networking side. This, of course, has now completely changed. Adding in the capabilities of Silver Peak will give HPE in its President and CEO Antonio Neri’s own works “critical capabilities that will help our customers modernize and transform their networks to securely connect any edge to any cloud.”
For those less familiar with Silver Peak than HPE, it has been a steady player in the SD-WAN space for some time having over 1,500 customers in production worldwide. It has built a strong business, holding about 7.4% of the market share for SD-WAN according to IDC. A chart, it is worth noting, that HPE does not feature on, despite having added SD-WAN to its Aruba offering prior to this acquisition.
So, the takeaways, naturally we expect HPE with its customer service and acquisition and transition experience to maintain Silver Peak’s existing customers. We expect the combination of HPE’s customers will increase the market share that Silver Peak previously demonstrated. Cavell are also optimistic that this company will be (assuming integration goes well) a strong force in a market that is hungry for edge-to-cloud support and intelligent management of networks both to and inside the office and other environments.
However, even with the power of both companies, competition is still going to be fierce in this space, as simply offering edge-to-cloud is not going to be enough. We have already seen big players like VMWare’s VeloCloud acquiring Nyansa, and Cisco acquiring Thousand Eyes with a goal to develop co-managed and then automated network functions. Will HPE be building or acquiring similar technology shortly to compete in that field as well? We are quickly going beyond the stage where edge-to-cloud data gathering and awareness is enough, to one where you need a strategy for using that data. So that sort of strategy/acquisition may be necessary for HPE to compete in this area at the level it clearly wants to.