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What HP's Aruba acquisition could mean to customers

If HP acquires Aruba, it may slow the wireless networking company's ability to innovate and lead to a confusing product portfolio, Aruba customer says.

Media reports that Hewlett-Packard was in talks to acquire Aruba Networks have raised concerns that Aruba's ability to innovate quickly and adapt to changes in the wireless market would suffer under HP.

HP was in negotiations to acquire Aruba, worth $2.4 billion, for its wireless LAN technology, several news organizations reported. HP and Aruba declined to comment Feb. 26.

Eric Hawley, chief information officer at Aruba customer Utah State University, believes HP wants Aruba for the innovative wireless technology it has been unable to build on its own. Once absorbed into HP's culture, he worries Aruba could lose its focus on invention.

"I do believe that once a company is largely only able to innovate through acquisition, the innovators they acquire suffer and innovation slows," he said.

In addition, merging Aruba's technology with HP's could result in a hodgepodge of competing products, Hawley said. Even more worrisome was whether HP would try to lock Aruba customers into its technology.

"Should HP acquire [Aruba], would they shift to a more Cisco-like strategy where they strategize, architect and engineer to achieve brand ownership of networking end to end?" Hawley said. For example, HP could require the use of its own switches at the edge of the network when using Aruba's Wi-Fi access points.

Other advantages with Aruba that could go away under HP rule is interoperability with LAN products from HP competitors like Dell and Brocade, Hawley said.

HP has botched some of its largest acquisitions, such as the $10.3 billion acquisition of Autonomy in 2011 that led to an $8.8 billion write-off a year later. The company, however, has had better success with smaller acquisitions, such as ArcSight and 3Par in 2010, experts said.

HP management has a lot on its plate without taking on a sizable acquisition. The company lowered on Feb. 24 its profit forecast for the current quarter and the fiscal year. It also reported that sales dropped across its divisions in the fiscal first quarter.

HP is also in the middle of splitting into two separate companies, one focused on its personal computer and printer business and the other on corporate hardware, software and services.

Acquiring Aruba, however, could help HP boost sales in the wireless market.

"An acquisition of Aruba would instantly vault HP into the number two spot in the industry behind Cisco," said Enterprise Management Associates analyst Shamus McGillicuddy.

Let us know what you think about the story; email Gina Narcisi, senior news writer, and follow @GeeNarcisi on Twitter. 

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