Advertisement
U.S. markets open in 1 hour 13 minutes
  • S&P Futures

    5,307.00
    -1.25 (-0.02%)
     
  • Dow Futures

    40,153.00
    +9.00 (+0.02%)
     
  • Nasdaq Futures

    18,499.00
    -4.75 (-0.03%)
     
  • Russell 2000 Futures

    2,140.20
    +1.80 (+0.08%)
     
  • Crude Oil

    82.47
    +1.12 (+1.38%)
     
  • Gold

    2,235.30
    +22.60 (+1.02%)
     
  • Silver

    24.72
    -0.04 (-0.15%)
     
  • EUR/USD

    1.0792
    -0.0037 (-0.35%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    13.02
    +0.24 (+1.88%)
     
  • GBP/USD

    1.2621
    -0.0017 (-0.13%)
     
  • USD/JPY

    151.3220
    +0.0760 (+0.05%)
     
  • Bitcoin USD

    70,422.83
    +265.75 (+0.38%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.37
    +20.39 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Why Did HP Acquire Aruba Networks?

Why Cisco's Stock Increased by 10% in February (Part 13 of 20)

(Continued from Part 12)

Acquiring Aruba would make HP a more potent competitor to Cisco

In the previous part of this series, we discussed how HP (HPQ) acquired Aruba (ARUN) to become an important player in the enterprise wireless network market. According to a report from IDC, Cisco’s share in this market declined from 51.6% in 3Q13 to 48.3% in 3Q14, while Aruba’s share increased from 9.4% to 11.5% during the same period. Meanwhile, Ruckus Wireless’s (RKUS) market share also increased from 5.6% to 6.3%. The chart below shows HP as the fourth-ranked player in this market.

The report also mentioned that the overall enterprise wireless network segment increased by a year-over-year rate of 9.6% in 3Q14, while the consumer wireless segment grew by 4.8%. The bulk of the growth in the enterprise segment came from Latin America, which grew by a year-over-year rate of 27.3%. The EMEA region grew by 15%, while North America grew by 7.5% and the Asia-Pacific region grew by 4.5%.

These findings show that Aruba is fast becoming a major player in this market, which is likely why HP would have been interested in buying the company. Acquiring Aruba would make HP a more potent competitor to Cisco (CSCO) in this space. HP’s acquisition of Aruba for $3 billion is HP’s largest acquisition since it acquired Autonomy for $12 billion in 2011.

Aruba will become part of HP Enterprise

Last year in October, HP announced its decision to break into two separate publicly traded companies. HP would form to include HP’s computer or PC and printer business. HP Enterprise will include the company’s corporate hardware, computer servers, data storage, equipment-software, and services business. Aruba will become part of HP Enterprise.

If you’re bullish about HP, you can invest in the NASDAQ Technology Dividend Index Fund (TDIV). TDIV invests 2.63% of its holdings in HP.

Continue to Part 14

Browse this series on Market Realist:

Advertisement