HPE Networking: Past, Present, and Future

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I had the chance to attend HPE Discover last week by invitation from their influencer team. I wanted to see how HPE Networking had been getting along since the acquisition of Aruba Networks last year. There have been some moves and changes, including a new partnership with Arista Networks announced in September. What follows is my analysis of HPE’s Networking portfolio after HPE Discover London and where they are headed in the future.

Campus and Data Center Divisions

Recently, HPE reorganized their networking division along two different lines. The first is the Aruba brand that contains all the wireless assets along with the campus networking portfolio. This is where the campus belongs. The edge of the network is an ever-changing area where connectivity is king. Reallocating the campus assets to the capable Aruba team means that they will do the most good there.

The rest of the data center networking assets were loaded into the Data Center Infrastructure Group (DCIG). This group is headed up by Dominick Wilde and contains things like FlexFabric and Altoline. The partnership with Arista rounds out the rest of the switch portfolio. This helps HPE position their offerings across a wide range of potential clients, from existing data center infrastructure to newer cloud-ready shops focusing on DevOps and rapid application development.

After hearing Dom Wilde speak to us about the networking portfolio goals, I think I can see where HPE is headed going forward.

The Past: HPE FlexFabric

As Dom Wilde said during our session, “I have a market for FlexFabric and can sell it for the next ten years.” FlexFabric represents the traditional data center networking. There is a huge market for existing infrastructure for customers that have made a huge investment in HPE in the past. Dom is absolutely right when he says the market for FlexFabric isn’t going to shrink the foreseeable future. Even though the migration to the cloud is underway, there are a significant number of existing applications that will never be cloud ready.

FlexFabric represents the market segment that will persist on existing solutions until a rewrite of critical applications can be undertaken to get them moved to the cloud. Think of FlexFabric as the vaunted buggy whip manufacturer. They may be the last one left, but for the people that need their products they are the only option in town. DCIG may have eyes on the future, but that plan will be financed by FlexFabric.

The Present: HPE Altoline

Altoline is where HPE was pouring their research for the past year. Altoline is a product line that benefits from the latest in software defined and webscale technologies. It is technology that utilizes OpenSwitch as the operating system. HPE initially developed OpenSwitch as an open, vendor-neutral platform before turning it over to the Linux Foundation this summer to run with development from a variety of different partners.

Dom brought up a couple of great use cases for Altoline during our discussion that struck me as brilliant. One of them was using it as an out-of-band monitoring solution. These switches don’t need to be big or redundant. They need to have ports and a management interface. They don’t need complexity. They need simplicity. That’s where Altoline comes into play. It’s never going to be as complex as FlexFabric or as programmable as Arista. But it doesn’t have to be. In a workshop full of table saw and drill presses, Altoline is a basic screwdriver. It’s a tool you can count on to get the easy jobs done in a pinch.

The Future: Arista

The Arista partnership, according to Dom Wilde, is all about getting ready for the cloud. For those customers that are looking at moving workloads to the cloud or creating a hybrid environment, Arista is the perfect choice. All of Arista’s recent solution sets have been focused on providing high-speed, programmable networking that can integrate a number of development tools. EOS is the most extensible operating system on the market and is a favorite for developers. Positioning Arista at the top of the food chain is a great play for customers that don’t have a huge investment in cloud-ready networking right now.

The question that I keep coming back to is…when does this Arista partnership become an acquisition? There is a significant integration between the two companies. Arista has essentially displaced the top of the line for HPE. How long will it take for Arista to make the partnership more permanent? I can easily foresee HPE making a play for the potential revenues produced by Arista and the help they provide moving things to the cloud.


Tom’s Take

I was the only networking person at HPE Discover this year because the HPE networking story has been simplified quite a bit. On the one hand, you have the campus tied up with Aruba. They have their own story to tell in a different area early next year. On the other hand, you have the simplification of the portfolio with DCIG and the inclusion of the Arista partnership. I think that Altoline is going to find a niche for specific use cases but will never really take off as a separate platform. FlexFabric is in maintenance mode as far as development is concerned. It may get faster, but it isn’t likely to get smarter. Not that it really needs to. FlexFabric will support legacy architecture. The real path forward is Arista and all the flexibility it represents. The question is whether HPE will try to make Arista a business unit before Arista takes off and becomes too expensive to buy.

Disclaimer

I was an invited guest of HPE for HPE Discover London. They paid for my travel and lodging costs as well as covering event transportation and meals. They did not ask for nor were they promised any kind of consideration in the coverage provided here. The opinions and analysis contained in this article represent my thoughts alone.

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Don’t Touch My Mustache, Aruba!

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It’s been a year since Aruba Networks became Aruba, a Hewlett-Packard Enterprise Company. It’s  been an interesting ride for everyone involved so far. There’s been some integration between the HPE Networking division and the Aruba teams. There’s been presentations and messaging and lots of other fun stuff. But it all really comes down to the policy of non-interference.

Don’t Tread On Me

HPE has done an admirable job of keeping their hands off of Aruba. It sounds almost comical. How many companies have acquired a new piece and then done everything possible to integrate it into their existing core business? How many products have had their identity obliterated to fit in with the existing model number structure?

Aruba isn’t just a survivor. It’s come out of the other side of this acquisition healthy and happy and with a bigger piece of the pie. Dominick Orr didn’t just get to keep his company. Instead, he got all of HPE’s networking division in the deal! That works out very well for them. It allows Aruba to help integrate the HPE networking portfolio into their existing product lines.

Aruba had a switching portfolio before the acquisition. But that was just an afterthought. It was designed to meet the insane requirements of the new Gartner Wired and Wireless Magic Quadrant. It was a product pushed out to meet a marketing need. Now, with the collaboration of both HPE and Aruba, the combined business unit has succeeded in climbing to the top of the mystical polygon and assuming a leading role in the networking space.

Could you imagine how terrible it would have been if instead of taking this approach, HPE had instead insisted on integration of the product lines and renumbering of everything? What if they had insisted that Aruba engineers, who are experts in their wireless field, were to become junior to the HPE wireless teams? That’s the kind of disaster that would have led to the fall of HPE Networking sooner or later. When good people get alienated in an acquisition, they flee for the hills as fast as their feet will carry them. One look at the list of EMC and VMware departures will tell you the truth of that.

You’re Very Welcome

The other thing that makes it an interesting ride is the way that people have reacted to the results of the acquisition. I can remember seeing how folks like Eddie Forero (@HeyEddie) were livid and worried about how the whole mess was going to fall apart. Having spoken to Eddie this week about the outcome one year later, he seems to be much, much more positive than he was in the past. It’s a very refreshing change!

Goodwill is something that is very difficult to replace in the community. It takes ages to earn and seconds to destroy. Acquiring companies that don’t understand the DNA of the company they have acquired run the risk of alienating the users of that solution. It’s important to take stock of how you are addressing your user base and potential customers regularly after you bring a new business into the fold.

HPE has done a masterful job of keeping Aruba customers happy by allowing Aruba to keep their communities in place. Airheads is a perfect example. Aruba’s community is a vibrant place where people share knowledge and teach each other how to best utilize solutions. It’s the kind of place that makes people feel welcome. It would have been very easy for HPE to make Airheads conform to their corporate policies and use their platforms for different purposes, such as a renewed focus on community marketing efforts. Instead, we have been able to keep these resources available to all to keep a happy community all around.


Tom’s Take

The title above is actually holds a double meaning. You might think it refers to keeping your hands off of something. But “don’t touch my mustache” is a mnemonic phrase to help people remember the Japanese phrase do itashimashite which means “You’re Welcome”.

Aruba has continued to be a leader in the wireless community and is poised to make waves in the networking community once more because HPE has allowed it to grow through a hands-off policy. The Aruba customers and partners should be very welcome that things have turned out as they have. Given the graveyard of failed company acquisitions over they years, Aruba and HPE are a great story indeed.

HP Is Buying Aruba. Who’s Next?

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Sometimes all it takes is a little push. Bloomberg reported yesterday that HP is in talks to buy Aruba Networks for their wireless expertise. The deal is contingent upon some other things, and the article made sure to throw up disclaimers that it could still fall through before next week. But the people that I’ve talked to (who are not authorized to comment and wouldn’t know the official answer anyway) have all said this is a done deal. We’ll likely hear the final official confirmation on Monday afternoon, ahead of Aruba’s big Atmosphere (nee Airheads) conference.

R&D Through M&A

This is a shot in the arm for HP. Their Colubris-based AP lineup has been sorely lacking in current generation wireless technology, let alone next gen potential. The featured 802.11ac APs on their networking site are OEMed directly from Aruba. They’ve been hoping to play the OEM game for a while and see where the chips are going to fall. Buying Aruba gives them second place in the wireless market behind Cisco overnight. It also fixes the most glaring issue with Colubris – R&D. HP hasn’t really been developing their wireless portfolio. Some had even thought it was gone for good. This immediately puts them back in the conversation.

More importantly to HP, this acquisition cuts off many of their competitor’s wireless plans at the knees. Dell, Juniper, Brocade, Alcatel Lucent, and many others OEM from Aruba or have a deep partnership agreement. By wrapping up the entirety of Aruba’s business, HP has dealt a blow to the single-source vendors that are playing in the wireless market. And this is going to lead to some big changes relatively soon.

The Startup Buzz

Dell is perhaps the most impacted by this announcement. A very large portion of their wireless offerings were Aruba. They sold APs, controllers, and even ClearPass through their channels (with the names filed off, of course). Now, they are back to square one. How are they going to handle the most recent deals? What are their support options?

I little thought exercise with my friend Josh Williams (@JSW_EdTech) had a few possibilities:

  1. Dell forces HP to buyout all the support contracts for Dell/Aruba customers. That makes sense for Dell, but it will turn a lot of customers against them, especially when HP lets those customers know the reasons why.
  2. Dell agrees to release the developments they’ve done on the platform to HP in return for HP taking the support business. Quiet and clean. Which is why it likely won’t happen.
  3. Dell pays HP an exorbitant amount of money to take the support contracts. This gives HP the capital to take on all those new support contracts and gives Dell an exit to rebuild. This is probably what HP wants, but could end up sinking the deal.

Dell got burned, plain and simple. They likely could have purchased Aruba months ago and solidified the relationship. Instead, they are now looking for a new partner. However, I don’t think they are going to get burned again. Rather than shopping for a friend, they are going to be shopping for an acquisition. My money has always been on Aerohive. They have an existing relationship. The Aerohive controller-less cloud model fits Dell’s new strategies. And they would be a much cheaper pickup than Aruba. There is precedence for Dell skipping the big name and picking up a smaller company that’s a better fit. It’s a hard pill to swallow, but it gives Dell the chance to move forward with a lasting relationship.

Softwarely Defined

Brocade is a line-of-business partner of Aruba. They’ve only recently gotten involved since Motorola shut down their WLAN business. This is a good sign for them. That means they can exit from their position and not be significantly affected. It does leave them with a quandary of where to go.

The first choice would be to go back to the Motorola relationship, now in the form of Zebra Technologies. Zebra inherited quite a large portion of the WLAN space from Motorola, but they’ve been keeping rather quiet about it. Are they angling to be more of a support organization for existing installs? Or are they waiting for a big splash announcement to get back in the game? Partnering with Brocade would give them that announcement given the elevated profile Brocade has today.

Brocade’s other option would be to go down the SDN road. The plan for a while has been to embrace SDN, OpenFlow, and all things software defined. The natural target for this would be Meru Networks. Meru has been embracing SDN as well as of late. They had a nice event last year showcasing their advances in SDN. Brocade could bolster that SDN knowledge while obtaining a good wireless company that would give them the strength they need to augment their enterprise business.

Permission To Retire

The odd company out is Juniper. I’ve heard that they were involved at first in trying to acquire Aruba, but when you’re betting against HP’s pockets you will lose in the long run. Their other problem is Elliott Management, everyone’s new favorite “activist investor”.

Elliott has made no secret that they see the value in Juniper in the service provider market. As far back as last year, Elliott has been trying to get Juniper to reave off the ancillary businesses, including security, enterprise, and wireless. Juniper has officially ended sales for Trapeze-based products already. Why would Elliott let them buy another wireless company so soon after getting rid of the last one. Even as successful as Aruba is, Elliott would see it as another distraction. And when someone that active is calling the shots, you can’t go against them, lest you end up unemployed.

This is the end for Juniper’s wireless aspirations. That’s not a bad thing, necessarily. This gives them the impetus needed to focus on the service provider market. It also gives them a smaller enterprise switching portfolio to package up and sell off should that pound of flesh be necessary to sate Elliott as well. Time will tell.

Everyone Else

Any other companies with Aruba relationships are either dipping their toes in the wireless waters or don’t care enough to worry about the impact it will have. It will be an easy matter for companies like Alcatel-Lucent to go out and find a new OEM partner, likely with someone like Extreme Networks or Ruckus. Those companies are making great technology and will be happy to supply the APs that customers need. Showing off their technology will also give them great in-roads into customers that might not have been on their radar before.


Tom’s Take

It’s going to be an exciting time in the wireless space. HP’s acquisition is going to start the falling dominoes for other companies to buy into the wireless space as well. When the dust settles, there will be new number twos and number threes in the market. It also clears the middle of the space for up-and-comers to grow. Cisco is going to stay number one for a while, and HP will be number two when this deal closes. But until we see the fallout from who will be purchased and partnered with it’s tough to say who will be a clear winner. But make sure you’ve got your popcorn ready. Because this isn’t over yet. Not by a long shot.

 

Will Dell Buy Aerohive?

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One rumor I keep hearing about in the industry involves a certain buzzing wireless vendor and the world’s largest startup.  Acquisitions happen all the time.  Rumors of them are even more frequent.  But the more I thought about it, the more I realized this may be good for everyone.

Dell wants to own the stack from top to bottom.  In the past, they have had to partner with printer companies (Lexmark) and networking companies (Brocade and Juniper) to deliver parts of the infrastructure they couldn’t provide themselves.  In the case of printers, Dell found a way to build them on their own.  That reduced their reliance on Lexmark.  In the networking world, Dell shocked everyone by going outside their OEM relationship and buying Force10.  I’ve talked before about why the Force10 pickup was a better deal in the long run than Brocade.

Dell’s Desires

Dell needs specific pieces of the puzzle.  They don’t want to be encumbered with ancillary products that will need to be jettisoned later.  Buying Brocade would have required unwinding a huge fibre channel business.  In much the same way, I don’t think Dell will end up buying their current wireless OEM, Aruba Networks.  Aruba has decided to branch out past the doing simple wireless and moved into wired network switches and security and identity management programs like ClearPass.  Dell doesn’t want any of that.  They already have an issue integrating the Force10 networking expertise into the PowerConnect line.  I’ve been told in the past the FTOS will eventually come to PowerConnect, but that has yet to happen.  Integrating purchased companies isn’t easier.  That becomes exponentially harder the more product lines you have to integrate.

Aruba is too expensive for Dell to buy outright.  Michael Dell spent a huge chunk of his cash to get his company back from the shareholders.  He’s going to put it on a diet pretty soon.  I would expect to see a few product lines slimmed down or outright dropped.  That makes it tough to justify buying so much from another company.  Dell needs a scalpel, not a sledgehammer.

Aerohive’s Aspirations

Aerohive is the best target for Dell.  They are clearly fighting for third place in the wireless market behind Cisco and Aruba.  Aerohive has never been shy about punching above their weight.  They have the mentality of a scrappy terrier that won’t go down without a fight.  But, they are getting pressure to expand quickly across their product lines.  They took their time releasing an 802.11ac access point.  Their switching offering hasn’t caught on in the same way that of Aruba or Meraki (now a division of Cisco).

Aerohive is on the verge of going public.  I’m sure the infusion of cash would allow them to pay off some early investors as well as fund more development for 802.11ac Phase 2 gear and maybe a firewall offering.  The risk comes when you look at what happened to Ruckus Wireless shortly after their IPO.  While they did recover, it didn’t look very good for a company that supposedly did have a unique claim, their antenna design.  Aerohive is a cloud management platform like many others in the market.  You have to wonder how investors would view them.  Scrappy doesn’t sell stock.

Aerohive is now fighting in the new Gartner “Wired and Wireless Access” magic quadrant, which is an absolute disaster for everyone.  An analyst firm thinks that wireless is just like wired, so naturally it makes sense for AP vendors to start making switches, right?  Except the people who are really brilliant when it comes to wireless, like Matthew Gast and Victor Shtrom couldn’t care less about bits on copper.  They’ve spent the better part of their careers solving the RF problems in the world.  And now someone tells them that interference problems aren’t that much different than spanning tree?  I would have long since planted my head permanently onto my desk if I’d been told that in their position.

Aerohive gains a huge backer in the fight if Dell acquires them.  They get the name to go up against Cisco/Meraki.  The gain R&D from Dell with expertise around cloud management.  They can start developing integration with HiveManager and Dell’s SMB extensive product line.  Switch supply becomes a thing of the past.  Their entire software offering fits well with what Dell is trying to accomplish from a device independence perspective with regards to customers.

Tom’s Take

I don’t put much stock in random rumors.  But I’ve heard this one come up enough to make me ask some tough questions.  There are people in both camps that think it will happen sometime in 2014.  Dell has to get the books sorted out and figure out who’s in charge of buying things.  Aerohive has to see if there’s enough juice left in the market to IPO and not look foolish.  Maybe Dell needs to run the numbers and find out what it would take to cash out Aerohive’s investors and add the company to the growing Empire of Round Rock.  A little buzz for the World’s Largest Startup couldn’t hurt.