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Aruba Networks led HP’s networking to record double-digit growth

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Aruba Networks acquisition boosts networking revenues

Previously in this series, we discussed the performance of The Hewlett-Packard Company’s (HPQ) Enterprise Group in 3Q15. We also discussed the various factors and individual sub-segment contributions that helped this segment post a positive growth in 3Q15. So far, we have covered the servers and storage sub-segment performances in 3Q15. Now let’s look at Networking.

Hewlett-Packard’s (commonly known as HP) recent acquisition of Aruba Networks (ARUN) boosted its networking revenues, which posted a growth of 22% in 3Q15. In constant currency terms, this growth was 28%, driven by good performance in all regions except China (FXI).

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In May 2015, HP acquired Aruba Networks for $3 billion in hopes of enhancing its role in the WLAN (wireless local area network) market. This is expected to boost HP’s stance and provide growth, as companies are increasingly more motivated to access work systems through their personal wireless devices. The rising trend toward BYOD (bring your own devices) is also expected to fuel this growth.

Cisco leads wireless network market

As the chart above shows—and according to IDC—Cisco Systems (CSCO) leads the enterprise wireless network market, followed by Aruba, Ruckus (RKUS), and HP. Ubiquiti (UBNT) is counted as one of the top 5 players in this space.

Although a distant second, Aruba is the second-largest player in terms of market share in the enterprise wireless network market. As a result, it’s a general consensus that the HP-Aruba deal is likely to initiate intense competition between HP and Cisco, given Aruba’s position against Cisco in the wireless networking space.

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