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Intelligent Edge Drove HPE’s Revenue in Fiscal Q2 2018

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Intelligent Edge revenue rose 17% YoY in fiscal Q2 2018

In the previous part of this series, we saw that Hewlett Packard Enterprise (HPE) had revenue growth of 10% YoY (year-over-year) in its second fiscal quarter. Its Intelligent Edge saw a 17% rise in revenue YoY, driven by strength in its product and services verticals.

Its LAN (local area network) revenue rebounded in its fiscal second quarter after a soft fiscal first quarter. Its wire switching vertical also remained strong. Although HPE’s Edgeline IoT (Internet-of-Things) accounts for a small portion of revenue, it saw strong customer traction with a significant win in the financial services industry in its fiscal second quarter.

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Cape Networks acquisition

Companies are now looking to take advantage of the huge amount of data created at the edge. That could provide a huge opportunity for companies such as HPE, Cisco Systems (CSCO), and Nokia (NOK). HPE continues to invest in its Intelligent Edge, acquiring Cape Networks in the second quarter.

The acquisition will accelerate HPE’s development toward autonomous infrastructure enabled by AI. According to CEO Antonio Neri, “Cape expands Aruba AI powered networking capabilities with a sensor-based network assurance solution that improves network performance, reduces disruptions and significantly simplifies IT management for our customers.”

In the second quarter, HPE introduced another AI-based analytics and assurance solution called Aruba NetInsight, aimed at optimizing network performance. It uses machine learning to monitor networks and deliver insights in case of variances.

HPE expects Intelligent Edge to be a key investment area over the next few years. It generated revenue of $710 million in the second quarter, with an operating margin of 6.5%.

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