Hewlett Packard Enterprise (HPE) has announced its intention to acquire SD-WAN provider Silver Peak for $925 million (£737.9m) to combine with its Aruba product for greater cloud networking.

The combination of the two companies, HPE said, would ‘accelerate cloud transformation for enterprises with a comprehensive edge-to-cloud networking solution covering all aspects of wired, wireless LAN, and WAN.’

While HPE will be best known to readers of this publication as a leader in the cloud infrastructure equipment space, the company has been working in building up leadership in two areas: hybrid cloud and edge computing.

Upon the launch of its Right Mix Advisor hybrid cloud consultancy program last March, Jean Atelsek of 451 Research explained the rationale. “HPE is continuing down the path of focusing on services delivered over hybrid infrastructure, and in particular for enterprise customers that want to take advantage of public cloud for suitable workloads but aren’t sure where to start given the ever-widening choice of venues,” she told CloudTech at the time.

Edge, meanwhile, has been a long-term focus – HPE pledged $4bn to invest in the intelligent edge in 2018 – and is the focus of this acquisition. Enterprises will be able to beef up their connectivity for remote working ‘without compromising quality or reliability’, as the company put it.

“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,” said Keerti Melkote, HPE president of intelligent edge and founder of Aruba Networks in a statement. “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,” Melkote added.

The price of the deal may raise a few eyebrows. As Tom Rebbeck, research director at Analysys Mason, pointed out, the price compares unfavourably with previous similar acquisitions, such as Cisco’s $610m swoop for Viptela in 2017. HPE cited a study from 650 Group which predicted the market for SD-WAN will grow to $4.9bn by 2024 at a CAGR of 20.5%.

Photo by Micheile Henderson on Unsplash

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