Hewlett Packard Enterprise has agreed to acquire Silver Peak for about $925 million to accelerate its push into the growing software-defined wide-area networking (SD-WAN) market.
As Reuters reports, demand for SD-WAN services “is increasing with many workers doing jobs remotely due to the COVID-19 pandemic.” HPE plans to integrate Silver Peak’s capabilities with its Aruba edge services platform.
“With this acquisition we are accelerating our edge-to-cloud strategy to provide a true distributed cloud model and cloud experience for all apps and data wherever they live,” HPE Chief Executive Antonio Neri said in a news release.
Keerti Melkote, president of Intelligent Edge for HPE, told Reuters that the two companies started to explore a deal late last year.
“We are seeing an accelerated need for technology like this because we are going to be working from home quite a bit,” he said. “The pandemic only accelerated our view that this was going to be a very strategic asset.”
The SD-WAN market is expected to grow from $2.3 billion in 2020 to nearly $5 billion in 2024, representing a compound annual growth rate of 20%, according to 650 Group.
Companies such as Colt Technology Services and Comcast Business have also been looking at offering SD-WAN services for remote workers.
“This [deal] continues the consolidation of the SD-WAN space,” Lee Doyle, principal analyst at Doyle Research, told Fierce Telecom. “I think it’s a good acquisition by HPE to get the Silver Peak customer base and the leading-edge SD-WAN technology.”
Silver Peak, which was founded in 2014, has annual revenue of more than $100 million and more than 1,500 customers. According to HPE, it helps enterprises and service providers to “quickly migrate to secure enterprise-grade SD-WAN connectivity, while dramatically improving application performance and lowering connectivity costs.”
“Bringing together Silver Peak’s advanced SD-WAN solutions with Aruba’s industry leading networking portfolio provides an unprecedented opportunity to deliver comprehensive business-driven solutions to our customers,” David Hughes, founder and CEO of Silver Peak, said.
HPE announced in 2018 that it would invest $4 billion in its Intelligent Edge edge-to-cloud architecture.