HP To Acquire Aruba Networks for $3 Billion

With an eye to expanding its reach into mobile services, HP has announced it will acquire Aruba Networks, which provides mobile networking software and services for IT departments and end-users. The $3 billion transaction is expected to close later this year.

HP said combining its wired switching portfolio with Aruba's mobility software and WLAN hardware will create a "potent combination" allowing the company to better meet the needs of enterprise customers. Aruba will become part of HP's networking business within the company's Enterprise Group organization.

The Aruba acquisition is HP's first major deal since October when it announced that it was splitting into two entities: HP Inc. and Hewlett-Packard Enterprise. That transition, aimed at creating more flexible organizations focused on different markets, is expected to be completed by this fall.

'Converged Campus Networks'

Founded in 2002, Aruba Networks builds and deploys access management systems, access points for wireless LANs, IT-centralizing mobility controllers and mobility access switches for wired networks. It also provides firewalls, intrusion protection and other security services.

Aruba reported annual revenues of more than $725 million in 2014, and realized double-digit growth in both revenues and gross margins as of February. Once Aruba's acquisition by HP is finalized, the new organization will be headed by Aruba CEO Dominic Orr and chief technology and strategy officer Keerti Melkote.

The Aruba acquisition will enable HP to help its customers transition to converged campus networks, HP Senior Vice President and General Manager of Technology Services Antonio Neri wrote in a Monday blog post. HP defines a converged campus network as "the next evolution in unified wired and wireless networks." The company said such an approach toward network management is easier to maintain, less expensive to set up and enables faster deployment of services.

$18 Billion Market

Bringing Aruba into HP's fold will help the company...

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