HPE to acquire SD-WAN firm Silver Peak for US$925 million

HPE will hand over approximately US$925 million (NZ$1.4 billion) to acquire major networking solutions specialist Silver Peak.

The deal will enable HPE to couple its Aruba Edge Services platform with Silver Peak's software-defined wide-area networking (SD-WAN) platform.

According to HPE, the combination will mean that customers can simplify branch office and WAN deployments to empower remote workforces, enable cloud-connected distributed enterprises, and transform business operations.

HPE adds that its 'intelligent edge' is part of its central strategy – in 2018 the company announced it would pour US$4 billion into the area over four years.

In light of the COVID-19 pandemic, the company reports that customers have stronger requirements for powerful solutions at the edge that put a premium on security, connectivity, and performance.

"Legacy WAN architectures are no longer viable and incur relatively high costs, compelling enterprises to invest in SD-WAN technology to ensure secure, scalable, and efficient connections from the edge of their network to a diverse mix of on-premises and cloud-based endpoints," the companies states.

Furthermore, the global SD-WAN market is experiencing major growth – analyst firm 650 Group forecasts the market will grow from US$2.3 billion in 2020 to $4.9 billion in 2024.

HPE chief executive officer Antonio Neri says that HPE was an early mover in the edge space.

"With this acquisition we are accelerating our edge-to-cloud strategy to provide a true distributed cloud model and cloud experience for all apps and data wherever they live. Silver Peak's innovative team and technology bring critical capabilities that will help our customers modernise and transform their networks to securely connect any edge to any cloud.

Silver Peak's SD-WAN and WAN optimisation offerings will also underpin HPE's efforts to expand Aruba's all-in-one DF-Branch strategy and remote working solutions.

Silver Peak founder and CEO David Hughes says this merger provides an 'unprecedented' opportunity to deliver more comprehensive business-driven solutions.

"The Silver Peak and Aruba teams share a common vision and goal to provide simplicity, scalability, and application-awareness at the edge. With Aruba's extensive go-to-market, we will further accelerate our ability to drive faster adoption of these transformational technologies.

The companies expect the combination to create opportunities for significant economic upside through enhanced growth and profitability by:

• Providing a superior value proposition to joint customers through integrated offerings that address a greater set of customer requirements
• Targeting an expanded TAM across SD-WAN and SD-Branch implementations
• Accelerating WAN transformations across HPE and Aruba's broad global customer base.

Aruba Networks founder and HPE president of intelligent edge, Keerti Melkote, comments, "Today's announcement comes at a unique moment for our customers, who are grappling with business recovery in the wake of the pandemic.

"The need for edge-to-cloud architectures has never been more relevant as enterprises look to extend connectivity to branch locations and enable secure work-from-home experiences. Silver Peak's technology transforms legacy WAN architectures to self-driving WANs, which is a perfect fit with Aruba's cloud-native, AI-driven Edge Services Platform. Together, we will be able to meet these needs with critical connectivity, security, and AI capabilities to drive the next generation of edge-to-cloud transformation.