HP in Talks to Buy Aruba Networks

The tech giant is looking to bolster its networking capabilities by acquiring Aruba, which sells wireless networking infrastructure products.


Hewlett-Packard reportedly is looking to boost its networking business by acquiring wireless networking vendor Aruba Networks.

Citing people with knowledge of the matter, Bloomberg reported that the two companies are in talks about a possible acquisition, though nothing has been finalized and a deal could collapse. One unnamed source said the a deal could be announced as early as next week. Aruba's annual user conference, Atmosphere 2015, is being held in Las Vegas next week.

Arauba spokesman Pavel Radda declined to comment on the HP report when contacted by eWEEK. An HP spokesperson would not comment when contacted by Bloomberg.

The report of a possible acquisition comes during a time of transition for HP, which is deep into a five-year turnaround program under CEO Meg Whitman that has included cost cutting—including more than 50,000 job losses—and targeted investments. It also comes as the tech giant works toward a deadline later this year to split in two, creating two Fortune 50 companies—one that will sell enterprise products and services and the other that will sell PCs and printers.

Despite the changes, Whitman said during a conference call Feb. 24 to discuss the latest quarterly financial numbers that she is pleased with the restructuring efforts and that "we’re on track with our turnaround and executing well on our separation." In an interview with Bloomberg after the company released its earnings, the CEO said that HP is "now in a position where we can actually make acquisitions, which we couldn't when we started" with the turnaround effort.

The networking business, which competes with the likes of Cisco Systems and Juniper Networks, struggled in the most recent quarter, with revenues falling 11 percent, to $562 million. Whitman put much of that on issues in the United States and in China, where the company made executive changes at its H3C networking unit. HP, like most other networking vendors, faces an uphill battle in the space. In the third quarter 2014, Cisco's share of the Ethernet switch market was 62.9 percent, while HP's was 9.3 percent, according to numbers from IDC.

Still, technologies like software-defined networking (SDN) and network-functions virtualization (NFV) continue to roil the market, and Whitman said during the conference call that HP would push forward with its plans to grow the networking business.

"We continue to bring new networking solutions to market," Whitman said. "We're focused on winning in this business and you will continue to see us make aggressive moves over the coming quarters. [Networking and storage] are important businesses to us and we will continue to invest in these businesses."

Most recently, HP last week joined Dell, Juniper and others in offering open networking switches that can run third-party software, filling a gap between traditional switches that house proprietary software and white-box makers that offer inexpensive commodity switches that can run a broad range of software.

Aruba, which is scheduled to announce quarterly financial numbers Feb. 26, generated a record $207.8 million in revenue, a jump of 29 percent. The company has been pushing to enable businesses to improve their wireless environments through an initiative introduced last year called Mobility-Defined Networking.