Oh dear
This will end badly... Except for whoever got the $3 Billion.
After a period of abstinence from mega buys, HP has dipped into its cash reserves to find $3bn (£2bn) for wireless infrastructure biz Aruba Networks. The deal will form a welcome plug to HP's sliding network biz, which fell 10.8 per cent to $562m (£365m) in the company's first quarter results last week. Aruba posted sales of …
In many respects, there's sure to be an unhappy end for some. Most importantly, there's the remaining components from HP's purchase of Colubris in 2008 that will undoubtedly become jettisoned in favor of the superior offerings from Aruba. I would think Cisco, Juniper, and Dell are less than thrilled as well.
But from a value perspective, many customers were already using HP switches and Aruba wireless in opposition to all Cisco, who clearly leads both markets. Given the distance that HP networking has come since the 3Com purchase (if you haven't tried them, the H3C-sourced switches are excellent), I would expect this is a generally happy announcement in most aspects. I can't see this as enhancing any consumer offerings, since neither HP or Aruba are significant players at present, but enterprises and service providers should be happy to fold into one vendor what used to be two.
"By combining Aruba's world-class wireless mobility solutions with HP's leading switching portfolio, HP will offer the simplest, most secure networking solutions to help enterprises easily deploy next-generation mobile networks."
And went on to add...
"Although I'd suggest you get your own professional services team to design, implement and support; as to be honest... we're just a little bit shit at that sort of thing."
I would tend to think you're dead on. It's been a common practice to buy a competitor and close it down (after many platitudes about synergy) but it seems more and more common to buy a competitor's supplier. I've not been overly impressed with Aruba items but they seem to work without many bells and whistles being present. But 3 really big ones seems an excessive price. Then again, HP, MS, Zuck and others have set a new standard for buying things at inflated prices so maybe this is the new "normal".
After HP's last acquisition disaster, one must wonder whether the Aruba buy will work out OK, or if it's another pig in a poke. HP's track record with acquistions is not exactly sparkling since the days of Carly. But maybe they've learned and can make this one work.
Yes it add wireless to HP's kit but I don't think it was about that. I think its more about hitting Dell/Juniper/Brocade as none of them will be wanting to continue this.
As I said to my Dell account manager 6 months ago drop Aruba and talk to Aerohive now I bet there is plenty of that going on.
Now some poor HP guy gets to deal with Aruba BOM lists (nightmare and among the worst) as well as dropping their prices as they are some 6-8 times more expensive than Aerohive (not sure of Cisco have not really used).