M&A, Organic Growth Position Aruba Networks as Fearsome Rival to Networking Incumbents
Eight years after Aruba's successful "reverse integration" into HPE, the networking vendor is poised to take on Cisco.
![Aruba Networks Aruba Atmosphere Phil Mottram Antonio Neri Aruba Networks Aruba Atmosphere Phil Mottram Antonio Neri](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/blt6b3ef352e7855619/6523fe01bc8356594c436dfc/IMG_2369-scaled-e1682518942520.jpg?width=700&auto=webp&quality=80&disable=upscale)
Aruba executive vice president and general manager Phil Mottram spoke on the balance of expanding into new areas while maintaining core competencies. Mottram approached his board with his goal for expanding in to three areas: data center, private 5G and cybersecurity.
“We’re trying to expand in areas that make sense for us and trying to not go too far away from core business, because otherwise you end up dropping dropping the ball on something else,” he told Channel Futures.
“When you try and do something that’s just so different to what you normally do, those sorts of things normally end in tears. So we’re trying to stay focused on what we can do sensibly, but also what we think customers will want in the future.”
HPE president and CEO Antonio Neri joined Mottram onstage to share his excitement for the future.
“I’m in my 50s now, and this is probably one of the most exciting days of my career, because this is the opportunity to do something that will remain the legacy of all of us. And I’m looking forward together we can do with Edge portfolio and we are continuing to do with you and the team,” he said.
Mottram noted that when HPE (then under the larger HP banner) bought Aruba, it underwent a “reverse integration.” In other words, HPE folded its networking business underneath Aruba. That move served to give Aruba more credibility, Mottram told Channel Futures.
“He was behind the acquisition; it was kind of his baby. And it was quite a gutsy move, because he he used to run HP networking, so actually he was somewhat giving up what he was running and pushing that under Aruba,” Mottram said.
Tuesday’s keynote session opened with a Parkour act. That session as well other branding at the event, have emphasized the theme of agility Aruba is trying to communicating to the market. Tuesday’s concurrent announcement of its Agile NaaS framework fit that theme. The framework contains six different categories that customers and partners use to select the ideal NaaS offering. That criteria includes demand profile, on-prem vs. public cloud and incremental adoption vs. full refresh.
Mottram said Aruba is trying to distinguish itself from competitors that impose a rigid definition of NaaS.
“We see quite a few customers moving away from buying networking equipment on a capex model and moving toward an opex model. One thing that we have learned is that one size doesn’t fit all. So we need to have a range of options in the market if we’re going to succeed,” he said.
Aruba head of marketing Silvia Hooks (left) and Mottram (right) interviewed CarMax vice president of information technology, enterprise systems and infrastructure operations.
CarMax ended up adopting Aruba’s network as a service (NaaS) but in a customized way that reflects the vendor’s newly publicized Agile NaaS framework. Shaffer purchased hardware for Wi-Fi infrastructure but wrapped ongoing services from Aruba around it.
He said that although many companies put capex and opex costs into two very separate buckets, he found an advantage in combining them. Especially when it came to finding budget space.
“You don’t just go to the CFO and say, ‘Hey, I need to go get some new infrastructure.’ You need to go and say, ‘Hey, I need to solve problems for the business. I need to solve problems for the future.’ And what I had to end up doing was coming up with a compelling story of how I’m going to do this investment over the next five actually in my case,” he said.
Turning to NaaS, as well as the increased AIOps capabilities of the Aruba Central management platform, provided value to his existing IT team. Automation, he said, enables existing jobs rather than replacing them.
“I’m trying to shift work to the left to allow you to focus on more innovation and more automation, because their plates are so full. They don’t have the time to do that. But I just can’t move work to the left and not take advantage of AIOps and those types of capabilities. I think my teams are vested into it.”
Mottram said surveys of Aruba customers have found that network managers spend an average of 85% of their time on managing day-to-day issues.
“If you’re a network engineer or a network manager, 85% of an eight-hour day [is spent] just grinding through network problems,” Mottram told Channel Futures. “If you’re given the opportunity to free up some of that time, then that makes a big difference.”
The idea of a single pane of glass came up in both of Aruba’s on-stage conversations with customers. Both CarMax’s Shaffer and Henkel’s Keven McCammon said the Aruba Central platform has allowed them to unify disparate devices and IT environments into a single view.
That includes combining the data center and network environment into one view, McCammon said.
“The ability to be able to look at the data center environment and the network environment all in one one view is extremely important to us. Because from a technology standpoint, our customers, which is the production centers, our offices, locations, but also consumers. If they’re not able to access the information quickly, then that impacts our business.”
“We had infrastructure across 65 countries, and we had infrastructure that was being managed in different ways. So bringing it all together was what Aruba Central offered to us. And now we’re in the midst of that coming to closure and migrating those locations. And what we’re seeing is the amazing part of being able to see our infrastructure and being able to update our infrastructure quickly,” said McCammon, who serves as Henkel’s director and head of global data denter and network operations.
Antonio Neri described Aruba Central as a fundamental differentiator.
“Whether you buy as a capex or opex, it doesn’t really matter. Fundamentally, we drive the unified cloud experience. At the bottom of it, we have built a common cloud platform with common cloud services, which the Aruba team contribute to, and we have made some adjustments to be able to comprehend all the scale and different types of services,” Neri said.
Mottram touched on the challenge of supply chain shortages that hampered much of the IT channel in the last year. Aruba partners and customers saw delays that impacted their businesses.
Mottram said Aruba has engaged in multiple strategies to mitigate those problems. First the vendor redesigned certain products to remove supply chain-constrained components. Aruba also worked to identify alternative suppliers.
Now Mottram is reporting strong improvements.
“For 85% of the products that we offer, there’s been a 50% reduction in the delivery timelines, and for the remaining 15% of the products that we offer, there’s been a 30% reduction in timelines. And we expect this, by the way, to continue to accelerate quite dramatically over the next few months,” he told the audience.
Mottram said Aruba’s network-as-a-service strategy has fit nicely with the company’s sustainability efforts. Its parent company, HPE, runs an asset upcycling, which processed 3 million network assets from customers and reused 85% of them.
And now NaaS is providing new opportunities for Aruba to recycle equipment.
“What we find is that with NaaS – buying the equipment on an opex type model – there’s a great opportunity to recycle and refurbish equipment for the customers as part of a NaaS service…” he said. “What we find is that many customers have network assets, be they HPE or competitor products, that still have some market value.”
HPE is in the process of purchasing Italian mobile core network provider Athonet and integrating it into the Aruba business.
The deal will create adjacencies between Athonet’s private 5G network capabilities and Aruba’s Wi-Fi expertise, Aruba executives have said. Asked on stage if he views private 5G as a Wi-Fi killer, Athonet founder Karim El Malki said he views the technologies as complementary.
And analysts have a greed with that view.
Sian Morgan covers the wireless LAN market for Dell’Oro Group. She said private 5G has taken off at a much slower rate than people previously expected.
“Private 5G For enterprises just has not had the pickup early on. And I think some people in the industry at the beginning were saying, ‘OK, this is it. It’s going to kill Wi-Fi. This is the end of Wi-Fi.’ And now pretty much everyone is converging on what the message was today. It’s not killing Wi-Fi,” she said.
She added that Dell’Oro predicts the size of the private 5G market to total 10% of the Wi-Fi market by 2027.
HPE has purchased Israeli cybersecurity provider Axis Security in a move that will move partners deeper into the secure access service edge (SASE) opportunity.
Axis provides zero-trust network access (ZTNA), cloud access security broker (CASB) and secure web gateway (SWG), all which comprise key next-gen security elements of SASE.
That will pair with Aruba’s existing SD-WAN capabilities to make Aruba’s own in-house SASE solution. HPE purchased SD-WAN Silver Peak three years ago and brought it into the Aruba portfolio.
Philip Allen, CEO of the HPE-exclusive MSP DataVizion, said he has seen customer appetite for SASE solutions that integrate SD-WAN and advanced cybersecurity.
“Not a lot of people are going to beat your door down for that [SASE] solution. But when we present the information … the amount of interest we’re getting is phenomenal. Even though they didn’t know they needed that or wanted that, they’re saying, ‘That sounds like a pretty good solution.’
Allen said DataVizion has historically needed to turn to other vendors for firewall. But he said he recently learned that Axis could help solve that gap in that Aruba portfolio.
The Atmosphere conference came with bombshell partner news: Channel leader Donna Grothjan is retiring.
Grothjan had served as vice president of worldwide channels for HPE Aruba Networking, having worked at HPE prior to the Aruba acquisition. Her seven-year tenure overseeing Aruba’s channel marks one of the longer stints of a modern channel leader.
Grothjan has worked in IT channel for 33 years and has also worked at Ingram Micro and Juniper Networks.
Attendees gathered at the Venetian Convention and Expo Center on Monday to register for Aruba Atmosphere.
Aruba partners, customers, employees and sponsors gathered in the Innovation Zone (expo hall) for a reception on Monday night.
In keeping with the “Innovation Zone” theme, Aruba displayed its technology during the reception.
Aruba partners, customers, employees and sponsors gathered in the Innovation Zone (expo hall) for a reception on Monday night.
Aruba partners, customers, employees and sponsors gathered in the Innovation Zone (expo hall) for a reception on Monday night.
ARUBA ATMOSPHERE — Aruba Networks is expanding its technology portfolio to provide a safe landing space for businesses leaving rival vendors “en masse,” Aruba executive vice president and general manager Phil Mottram said.
Aruba’s annual conference has been a showcase for how the HPE-owned networking vendor has evolved from its predominantly wireless identity. The company is growing both organically and inorganically to expand into data center, private 5G and cybersecurity.
For example, HPE has recently announced acquisitions of private mobile core network provider Athonet and cybersecurity provider Axis Security. Buying Athonet establishes a private 5G network play that executives say will complement Aruba’s Wi-Fi practice. And Axis’s next-gen cybersecurity features can integrate with Aruba’s Silver Peak SD-WAN business to create a full secure service edge (SASE) offering. At the same time, Aruba has built out service packs for channel partners to deliver network as a service to customers.
HPE’s Antonio Neri
Aruba Networks represented HPE’s first acquisition under the leadership of president and CEO Antonio Neri in 2015. Since then, HPE has gone on to acquire 35 companies over seven years. Neri said HPE needs to balance “organic innovation” with “targeted acquisitions” that complement those organic innovations.
“You need to complement your organic investment through targeted acquisitions, maintaining a very disciplined return on invested capital structure,” Neri said on the keynote stage at Atmosphere.
Mottram noted that the inorganic growth stems in part from an opportunity Aruba sees to take disgruntled customers from other vendors.
Aruba’s Phil Mottram
“We do hear from customers that they’re frustrated with some of our competitors and they want to move en masse away from our competitors and over to Aruba. And when they do that, they want us to have a broader product portfolio,” he said.
Widening the Portfolio
Vice president of portfolio solutions marketing Larry Lunetta said Aruba was functioning primarily as a wireless vendor when HPE acquired it. But he said the company has seen the need to expand that identity as it seeks to overtake incumbents. He and other Aruba executives refrained from uttering the name “Cisco” in interviews with Channel Futures, but they made the point they are working to build a fearsome competitor.
Aruba’s Larry Lunetta
“My favorite saying goes back a ways that nobody ever got fired for buying IBM. There’s a network equivalent, but all those things come to an end,” Lunetta told Channel Futures. “And we think that’s coming to an end for networking. Part of the rationale for these acquisitions is, if you’re not going to take the safe choice, your alternative needs to be pretty close to that. Not necessarily in terms of total revenue, but in breadth of portfolio, financial resources, global reach and brand innovation. If you’re going to leave the safe choice, I don’t think there’s anybody that matches us.”
Aruba Networks Partner Perspective
Philip Allen runs Lincoln, Nebraska-based DataVizion. The MSP partners exclusively with Aruba for wired and wireless solutions. And he said Aruba’s portfolio growth proportionately helps DataVizion serve its customers.
DataVizion’s Philip Allen
“Each time Aruba makes one of these acquisitions that expands their portfolio, it actually helps us quite a bit, because now I can go provide the service. For example, if [customers] say, ‘We need a full edge SD-WAN solution,’ I can say, ‘I’ve got you covered.’ So for us, it’s mapped perfectly for our expansion to be able to provide comprehensive solutions for our clients,” Allen told Channel Futures.
Allen, Mottram, Neri and other key Aruba stakeholders are on the scene in Las Vegas for Aruba Atmosphere. Channel Futures covered the Tuesday keynote, which includes perspectives from customers and some of the companies HPE is acquiring. Read about Atmosphere, Aruba’s M&A strategy, customer adoption of network-as a service in the 15 slides above.
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