In this vignette of The 5G Factor, Ron Westfall and Steve Dickens provide their perspective on HPE completing its acquisition of private wireless specialist Athonet and its impact on the private 5G market segment and the overall 5G ecosystem.
The conversation focused on:
HPE Completes Acquisition of Private 5G Specialist Athonet. With the acquisition of Athonet, HPE sets the company’s sights on bringing private 5G and WiFi together to augment and innovate enterprise connectivity including using HPE GreenLeke’s edge compute and security/SASE portfolio assets. HPE’s Aruba portfolio is already widely deployed throughout global WiFi implementations putting HPE in a strong position to drive private 5G and WiFi services and capabilities, including mixed network scenarios, according to customer needs. HPE also gains 450 more deployments across major verticals such as healthcare, transportation, utilities, and government. We assess what the completion of the acquisitions means for the private 5G market and the overall 5G ecosystem.
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Transcript:
Ron Westfall: And recently HPE, speaking of private 5G, completed its acquisition of Athonet. And we have the opportunity, HPE Discover, to talk with some of the key HPE decision-makers in that acquisition. And clearly, HPE understands where the market is evolving toward. And certainly, when you’re targeting the enterprise space, you need a good private 5G story. And one thing that I think is important here is that when they completed the acquisition of Athonet, it just wasn’t about the private 5G, but also combining private 5G with wifi. And so that plays to what we believe is HPE’s strong suit in the Aruba networking part of their portfolio. Clearly, Aruba is a bonafide wifi supplier technology, and what we’re seeing more of is, it can be called private public blending, of these implementations.
If you’re a large enterprise with distributed facilities where you have a lot of outdoor resources to support, like a mining operation or a maritime facility, yes, wifi makes sense. And for example, the indoor facility, the enterprise is already familiar with it, it’s been using it for many years, but then you can come along and use private 5G, or private 4G and 5G as needed, to really reach those long distance points because wifi isn’t simply designed for that. And so we’re anticipating more uptake of that important combination of technologies.
And I think a couple other benefits that HPE gains with this acquisition is that Athonet is already a proven player in this field. It has over 450 deployments and key verticals like healthcare, transport, logistics, utilities, as well as government. Some of the verticals that I just touched on. But I think what’s important here is that for Athonet, I think the acquisition was pretty much a no-brainer because what is interesting about this market, it’s hard to say how it will break out even though it’ll grow overall.
Now, there’ll be some enterprises who will prefer to do their own private 5G implementation, but clearly, there’s a telco play here because the telcos have all this built in expertise and knowledge over decades related to radio spectrum, related to radio technologies, how to optimize the route and so forth. So this is something that could be a strong suit for them. We’re seeing more of that.
And then there’s the cloud providers, and then there could just be scenarios where all three of them are working together at a fundamental level, or two of them are basically, the cloud provider and the telco, are working together to support the enterprise’s private 5G implementation. So all these variations requires a major supplier like HPE to be able to address all of these potential scenarios, regardless of how quickly the different segments grow and so forth.
And, Steve, you’re at HPE Discover as well. What was your impression of HPE’s overall approach and their potential impact on the 5G space?
Steven Dickens: Well, I mean, I think when we think of HPE, we think about them in the data center, we think about their storage portfolio, we think about their compute portfolio, we think about them, the GreenLake sort of set of offerings. Don’t think we naturally jumped to Aruba and the networking space. And I think we had some time at HPE Discover where the marketing leadership talked about a rebranding exercise that’s going to be going on.
I think what I took away was, and also from Antonio Neri’s keynote of how central networking is going to be to the new HPE as they kind of reimagine. I think this Athonet acquisition sort of furthers the focus on Aruba. I think it makes sense for all the technical reasons that you described. I think HPE’s got the brand permission to do more in this space. I think bringing that as a service kind of GreenLake component to it is going to be fascinating for me because I think people are going to be deploying a lot of infrastructure at scale over the next three or four years. Do you want to do that on a CapEx? Do you want to do that on an as a service model? I think the market’s voting with its dollars there and is going to want to do that as a service.
So I think this makes sense from a technology point of view, as you described. You’re the expert there, but it makes sense to me from that perspective. But I think it also fits into the wider strategy from HPE. I think Aruba’s going to be more central to them going forward. And if they can couple that with what good progress they’ve been making with retooling their business, not only the technology, but retooling their sort of financial systems and their reporting structures and their go-to-market efforts around GreenLake, I think that the two make perfect sense to me. So I think for the technology reasons you described, this makes sense. All the things we were talking about around edge and the explosion that’s going to happen and that confluence of factors coming together play into this same discussion. But I think it makes sense for me on a wider strategic level.
As I say, just the amount of air time Antonio gave networking as part of his keynote, we sit in a lot of keynotes, and those don’t come together by accident. They don’t pick topics at random. People don’t freestyle those keynotes. There’s a lot of thought and effort to align that sort of precious keynote maybe hour of time to be aligned with the corporate strategy. And I took away how much of that keynote was focused on networking and where HPE was going. I think he pulled a couple of guests up onto the show floor, onto the stage that really helped reinforce that message as well. So I think this is interesting for HPE. I think we’re going to see more from them in the space, and it makes sense to me.
Ron Westfall: Yeah, no, I think you had a couple of great points, Steve. One is this certainly involves HPE GreenLake, so HPE GreenLake will definitely be playing a pivotal role in being able to support not just, for example, private 5G and wifi integrations, but also it’s the edge computing aspects, the hybrid cloud aspects, the security aspects such as SASE and so forth. So this, again, is I think just a great meeting of two portfolios.
And yeah, you’re right on. Antonio certainly prioritized the fact that GreenLake itself is making a lot more inroads with the overall market. It’s presence is broader. I think it’s over 10 billion in bookings now and over one billion ARR. And so, no, those are our impressive takeaways no matter who you are. And so it demonstrates that HPE is executing in this area, and that it could definitely play a very strategic role for many organizations out there in terms of how they want to optimize private 5G for their own specific use case needs. And that requires HPE resources, channels, service support capabilities and so forth. So I think that is a definite thumbs up on that particular move.
Steven Dickens: Well, I think that you hit on a point there that’s worth sort of double clicking on. HPE’s got a huge channel and tens of thousands of customers. Bringing that route to market to the Athonet technology is going to be huge. I mean, I can see that instantly being additive to this portfolio. HPE’s got a lot of established contractual relationships with clients. It’s got a lot of existing channel partners signed up globally. So from the route-to-market and go-to-market perspective, it’s very easy to bring a new product through that very established go-to-market model. It’s a lot harder to build a go-to-market model and bring a new product through it. So I think that’s going to be additive for HPE and Athonet going forward.
Ron Westfall: And the overall ecosystem. More competition for, say, private networking market-leader Nokia, but also all the other providers out there that are targeting the private 5G space. Now, we know most of these deployments are still 4G, at least 80% from my perspective, but we know private 5G will eventually become a bigger portion of that, and that’s where the investment dollars are going. It’s a no-brainer. If you can use private 5G, then you’ll go with it, versus a 5G implementation for certainly those use cases we touched on. The ones that require the lower latency, the across the board security, and certainly the greater bandwidth and so forth.
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Author Information
Ron is an experienced, customer-focused research expert and analyst, with over 20 years of experience in the digital and IT transformation markets, working with businesses to drive consistent revenue and sales growth.
He is a recognized authority at tracking the evolution of and identifying the key disruptive trends within the service enablement ecosystem, including a wide range of topics across software and services, infrastructure, 5G communications, Internet of Things (IoT), Artificial Intelligence (AI), analytics, security, cloud computing, revenue management, and regulatory issues.
Prior to his work with The Futurum Group, Ron worked with GlobalData Technology creating syndicated and custom research across a wide variety of technical fields. His work with Current Analysis focused on the broadband and service provider infrastructure markets.
Ron holds a Master of Arts in Public Policy from University of Nevada — Las Vegas and a Bachelor of Arts in political science/government from William and Mary.
Regarded as a luminary at the intersection of technology and business transformation, Steven Dickens is the Vice President and Practice Leader for Hybrid Cloud, Infrastructure, and Operations at The Futurum Group. With a distinguished track record as a Forbes contributor and a ranking among the Top 10 Analysts by ARInsights, Steven's unique vantage point enables him to chart the nexus between emergent technologies and disruptive innovation, offering unparalleled insights for global enterprises.
Steven's expertise spans a broad spectrum of technologies that drive modern enterprises. Notable among these are open source, hybrid cloud, mission-critical infrastructure, cryptocurrencies, blockchain, and FinTech innovation. His work is foundational in aligning the strategic imperatives of C-suite executives with the practical needs of end users and technology practitioners, serving as a catalyst for optimizing the return on technology investments.
Over the years, Steven has been an integral part of industry behemoths including Broadcom, Hewlett Packard Enterprise (HPE), and IBM. His exceptional ability to pioneer multi-hundred-million-dollar products and to lead global sales teams with revenues in the same echelon has consistently demonstrated his capability for high-impact leadership.
Steven serves as a thought leader in various technology consortiums. He was a founding board member and former Chairperson of the Open Mainframe Project, under the aegis of the Linux Foundation. His role as a Board Advisor continues to shape the advocacy for open source implementations of mainframe technologies.
