Hewlett Packard Enterprise Co.’s just-reported financial results were certainly interesting and show continued progress, but that wasn’t the most interesting announcement HPE made Thursday.
Aruba, the networking division of HPE, announced its intent to acquire Israel-based Axis Security Ltd., which is one of many providers of secure service edge, or SSE, on the market today. Axis came to market with zero-trust network access as a service but since then has added other core components of SSE, including cloud access security broker, or CASB, and secure web gateway, or SWG. It also has digital experience management or DEM, which isn’t typically associated with security, but I believe an important part of SSE.
Security tools see all traffic that runs across the network and use it to find threats. The same traffic can be analyzed to understand how applications are performing without having to deploy agents. In early 2020, Zscaler introduced its DEM solution, and since then others, such as Netskope Inc. and Axis have followed suit. I’d like to see Gartner make it a core component of the SSE Magic Quadrant to highlight the importance of it.
The addition of Axis is highly complementary to Aruba and HPE. The company has a strong software-defined wide-area network solution from its acquisition of Silver Peak, which includes a network-based firewall and dynamic segmentation. More and more customers are looking for a full solution for secure access service edge, or SASE, which is the combination of SD-WAN and SSE. Prior to the acquisition, Aruba could deliver SASE only through a partnership but upon closing, will have its own solution.
SSE is important today, since the buying motion for SASE changed through the pandemic. Prior to COVID-19, SASE buying was led by SD-WAN and then customers looked to SSE to secure internet-based connectivity. But then the world changed, and businesses moved workers from branch offices to their homes and SASE buying became security-led because there was a need to protect home workers. Now that companies are shifting to a hybrid work model, it’s possible the buying pendulum could swing back to network-first, but in either case Aruba will have a solution.
Although there are several SSE vendors, Axis should be a good fit for Aruba. No purchase price was given, though the reported amount was under $500 million, which is small for a company the size of HPE. Axis has good technology but has only 150 people, making it difficult for it to scale up. HPE can take the technology and drop it into its massive organization, enabling Axis to scale.
From a corporate perspective, Axis is a software-as-a-service-based solution, which positively contributes to the shift to subscription revenue. Also, HPE’s primary go-to-market model is now the GreenLake edge-to-cloud platform, and Axis Security’s cloud-native platform should roll nicely into it to enable customers to buy SASE with a single monthly subscription.
This acquisition comes on the heels of HPE announcing the purchase of Athonet, a provider of LTE and 5G solutions. Prior to that, Aruba’s last major acquisition was Silver Peak in July 2020, which gave Aruba a solid SD-WAN offering. The gap in acquisitions is likely the result of the leadership turnover as Aruba Chief Executive Keerti Melkote and Chief Technology Officer Partha Narasimhan left within months of each other. The two acquisitions in close proximity are a sign that the Aruba group of HPE may be revving up the mergers-and-acquisitions machine.