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HPE Snaps Up Silver Peak for $925 Million

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HPE on Monday said it will acquire Silver Peak, the SD-WAN company, for $925 million. HPE’s strategy is to move Silver Peak into its Aruba business unit for a comprehensive edge-to-cloud networking solution.

Each vendor brings unique capabilities to the merger. Aruba brings its wired and wireless prowess, and Silver Peak, its SD-WAN expertise.

HPE Aruba's Keerti Melkote

HPE/Aruba’s Keerti Melkote

“Silver Peak will be combined with the HPE Aruba business, led by Keerti Melkote, and will expand Aruba’s technology leadership in the large and fastest growing SD-WAN segment of the market,” said Antonio Neri, HPE CEO and president. “The combination of Aruba and Silver Peak will create an industry leader for the edge-to-cloud era with a comprehensive end-to-end networking solution.”

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.

The SD-WAN Acquisition Rationale

HPE outlined why the acquisition makes sense:

  • The combination of the two players will accelerate cloud transformation for enterprises. They’ll get a comprehensive edge-to-cloud networking solution covering all aspects of wired, wireless LAN and wide area networking.
  • Silver Peak’s intuitive, self-driving WAN delivers significant cost savings while maintaining application performance for rapid business recovery in a post-COVID world.
  • Silver Peak complements Aruba’s existing work-from-home and branch office solutions.
  • The acquisition significantly expands Aruba’s addressable market and is highly accretive to Aruba’s revenue growth and gross margins.
  • The combination of the two vendors accelerates growth of high margin recurring revenues with compelling economics.
  • Silver Peak is highly synergistic with Aruba’s customer base, innovation DNA and sales channel.

Silver Peak’s SD-WAN offerings complement and strengthen Aruba’s Edge Service Platform (ESP). By combining Silver Peak’s SD-WAN with Aruba’s SD-Branch products and services, customers can simplify branch office and WAN deployments. This will empower remote workforces, enable cloud-connected distributed enterprises, and transform business operations without compromising quality or reliability, the companies said.

We recently compiled a list of 20 top SD-WAN providers offering products and services via channel partners.

In early June, Aruba made two significant ESP announcements. First, Aruba announced ESP, an AI-powered, cloud native platform designed to automate, unify and protect the edge. The company quickly followed up with enhancements to the Aruba Partner Ready for MSP program for ESP. The vendor’s goal — to drive more partners to sell cloud services and new consumption models.

SD-WAN a Good Bet

Revenue for the SD-WAN appliance and control and management software market increased by 75% in the fourth quarter of 2019, as service providers increasingly offered SD-WAN as part of managed service bundles, according to the Omdia Data Center Network Equipment Market Tracker.

SD-WAN market revenue reached nearly $640 million that quarter. That was up from less than $365 million during the same time period in 2018. SD-WAN 2019 revenue hit $2 billion and is projected to reach $4.8 billion by 2024.

Regarding today’s announcement, Silver Peak and Aruba will continue to operate as separate entities, or business as usual. After the acquisition closes, Silver Peak and Aruba will determine how to best engage …

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