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    Aruba Acquires Silver Peak to Strengthen Its SD-WAN Portfolio

    By
    ZEUS KERRAVALA
    -
    July 14, 2020
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      Aruba.SilverPeak

      Hewlett Packard Enterprise on July 13 revealed its intention to acquire SD-WAN and WAN optimization vendor Silver Peak for $925 million. In its announcement, HPE said Silver Peak will be rolled into the Aruba business unit, now known as HPE’s Intelligent Edge division and headed up by Keerti Melkote, Aruba’s founder. This is certainly no surprise because Aruba has been in WAN transformation for more than a decade.

      In 2009, Aruba released its Remote Access Point (RAP), which was arguably one of the first SD-WAN products. We weren’t using the “SD” terminology then, but RAP was one of the first products to leverage broadband as the primary connectivity method.

      Silver Peak Compliments Aruba’s SD-Branch 

      Aruba’s current SD-WAN solution is targeted at customers that have bought into the vision of “SD-Branch” that brings together SD-WAN plus branch networking such as WiFi and switching as well as the management and analytic capabilities in Aruba Central. Silver Peak is an excellent complement to Aruba because it expands HPE’s addressable market to customers who want to focus more on WAN transformation. 

      Silver Peak has had an interesting journey to being one of the mainstream SD-WAN vendors. The company was born in the early days of WAN optimization but could never match the brand recognition of Riverbed, which was publicly traded and had a CEO who wasn’t afraid to call the mainstream networking industry “broken.”  Also, much of the early Silver Peak business was in data center replication versus the broader WAN market. 

      Silver Peak aggressively went after SD-WAN early 

      Then along came SD-WAN and Silver Peak showed good vision and leadership in making a hard pivot to that market while it was still in its infancy.  At that time, WAN optimization was much bigger but Silver Peak chose to disrupt itself and go after the emerging market. The move paid off as the company got a great exit package because the purchase price of $925 million equates to about a 7x multiple of its annual revenue.

      For Aruba, Silver Peak rounds out its offering nicely. As I mentioned before, Aruba was able to address the needs of customers who were looking at branch transformation holistically. Silver Peak is better suited to businesses that want to quickly migrate to an SD-WAN with technology that can overlay on whatever is currently in place. This includes pure broadband WANs as well as hybrid networks that include some level of MPLS combined with broadband. Silver Peak’s SD-WAN also simplifies direct connectivity to clouds via split tunnels. 

      WAN optimization is still used by large enterprises 

      I believe the WAN optimization capabilities are a key asset of this acquisition, although it got no coverage in any news story I read. While SD-WAN is hot and gets all the headlines, large enterprises are using SD-WAN to augment their global MPLS networks. This type of WAN optimization gives MPLS a significant performance boost. WAN optimization isn’t as sexy as it once was but for large companies with global networks, it’s critically important, and Aruba has many of those organizations as customers. 

      This does give Aruba two SD-WAN offerings, which begs the question of whether the company will bring them together. On a call with Aruba SVP Michael Dickman, I asked him about whether this would be a short-term or long-term initiative. He admitted that eventually the company would want to bring together Aruba and Silver Peak, but that it’s not on the near-term roadmap. Dickman pointed to the success Aruba has had within HPE by allowing it to run independently, and Aruba will be doing the same with Silver Peak.  

      Aruba is now a leader in WAN and LAN 

      Another interesting aspect of the acquisition is it brings some WAN expertise into Aruba. While the company and its parent HPE have both danced around the WAN for years, its expertise is really in wired and wireless switching. Silver Peak, of course, was born in the WAN and understands it better than most companies. I believe this makes the combined Aruba|Silver Peak the only vendor in the leader’s quadrant for Gartner’s wired and wireless Magic Quadrant and WAN infrastructure, which is quite the distinction. As cloud, mobility and IoT grow in deployments, the ability to offer an end-to-end network becomes increasingly important as the lines between WAN, campus network, wired network, etc. start to blur. 

      The purchase is well timed as well, because the COVID-19 pandemic is giving the network, particularly SD-WANs, a shot in the arm. ZK Research recently ran a Work From Home Study and asked about the role of the network. In the survey, 58% of the respondents stated the pandemic has increased the value of the network. Also, 46% stated COVID-19 has accelerated the company’s SD-WAN deployment timeline. Aruba already had a strong remote access story and now can add SD-WANs to the mix.  Ideally, it could bring the two solutions together, enabling network administrators to create a single set of policies that could be applied to a branch office or an individual worker.  

      Zeus Kerravala is an eWEEK regular contributor and the founder and principal analyst with ZK Research. He spent 10 years at Yankee Group and prior to that held a number of corporate IT positions.

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