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Networking Continues to Drive Revenue for HPE

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Intelligent Edge business segment revenue rose 10% in Q3

While Hewlett Packard Enterprise (HPE) continues to fight weak demand in the hybrid IT space, the company has managed to achieve double-digit revenue growth in the Intelligent Edge business. As we can see below, HPE’s Intelligent Edge revenue rose 10% YoY (year-over-year) to $785 million in fiscal Q3 2018. This business accounts for over 10% of HPE’s total revenue. In the third quarter, HPE’s Intelligent Edge revenue was driven by strength in the campus segment as well as the company’s cloud offerings.

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Huge growth opportunity for HPE

HPE believes there is a significant growth opportunity to be unlocked in Intelligent Edge over the long term, and this business remains a key area of investment for HPE. The company is banking on the data-driven transition towards the edge. HPE defines Intelligent Edge as the world outside the data center. Market research firm Gartner estimates that 75% of the global data is generated at the “edge.”

During the company’s earnings call, HPE CEO Antonio Neri stated, “I am certain that the rise of Intelligent Edge is the next great market transition coming. And HPE is uniquely committed to and built for this transition. We already have a competitive advantage at the edge with Aruba, pioneering networking with HPE’s deep history in continued innovation, compute storage and services.”

HPE aims to invest approximately $4 billion in this business over the next four years. HPE is confident about its portfolio of Intelligent Edge solutions. HPE’s Aruba bagged a contract with Caesars Entertainment where the latter will roll out Aruba’s wireless LAN across large public venues. HPE also inked a deal with the University of Arkansas to replace the latter’s existing networking system including software and security.

HPE is gaining traction in the high growth IoT (Internet of Things) space with its Edgeline system. HPE’s solutions have enabled a leading auto manufacturer to deploy Edgeline systems and helped to integrate operational technologies with enterprise-class IT functions, which has resulted in lower operating costs and an increase in production rates.

Earlier this year, Microsoft (MSFT) stated that it would invest $5 billion in the IoT space including Intelligent Edge.

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