What have we here? As we navigate the one-way system at the far end of hall three at MWC last month, and amble up the stairs into a serious-sized meeting room to meet with Andrew Border, in charge of product management for telco solutions at Hewlett Packard Enterprise (HPE), there is some talk with press staff about the anniversary of HPE’s acquisition of Athonet, and its pending deal for Juniper Networks; and then we sit down, and the door opens, and in walks Gianluca Verin, chief executive at Athonet. It’s a two-fer, and Verin is in a chatty mood.
And why not? It is 12 months, almost to the day, since HPE snapped up Athonet, a genuine pioneer in the trendy private 5G space, co-founded by Verin and Karim El Malki, old comrades at Ericsson, almost two decades ago in Vicenza, in Italy.“We brought you a cake,” jokes Border, an affable Australian, formerly with Dolby and Cisco, who joined HPE’s telco solutions in November. Indeed, HPE’s deal for Athonet took the cake (in a good way) at last year’s MWC, before the show had even started. At once, it made HPE into a serious player in the new edge-cellular game.
There is a cheerful and easy mood in the room; partly because of the cultural mix, but also just because the pair have good stuff to reflect on, including the deal for Juniper Networks, announced at the start of the year. The pieces are falling into place for HPE, the message goes – beyond and around its traditional supply of IT servers and Wi-Fi gear (etc). Verin (pictured below left) says: “I never sold a company before, and I’ll never do it again. Because it took us 20 years to build this one, so it’s a once-in-a-lifetime thing. Some people sell companies for a living, but I’m not one of them.”
Border (pictured above right) comments: “I’m relatively new here; newer than Luca. But I remember my first leaders’ conference in Miami, where [HPE president] Antonio [Neri] and the team talked about private 5G at every opportunity; right through Phil Motrram’s [Aruba] group, where we roll-up. So at the top level, [private 5G] has been a major focus. In terms of acquisitions, it wasn’t the size that mattered, but the opportunity and the talent. And as a newcomer, I was super impressed – how the message has been communicated about the significance of the opportunity and and the team.”
Indeed, takeovers, including recent ones in the private 5G space, are difficult. Corporate parentage drains can-do entrepreneurial spirit, the story goes, and singular talent is easily lost. Border and Verin make repeated reference to HPE’s $2.7 billion purchase of Aruba Networks in 2015 as an M&A yardstick – for how not to ruin what makes a business valuable in the first place. Interestingly, the integration policy with Athonet – influenced, perhaps, by the more complex fusion process its pending $14 billion deal for Juniper will bring about – is to leave-alone, to an extent.
Verin explains: “To HPE’s credit, it knew before the acquisition how it wanted to conduct [the integration]. It had the Aruba example, which is a shining example of how to integrate a company. So it decided the P&L will be retained by the founders, and there has not been any interference. We have been free to conduct our business. Which means our people are looking to see how they can make a difference in this new environment – even if there is sometimes a struggle because integration is not easy. But there are many possibilities; some constraints, but more possibilities.”
He adds: “It has been an important year – a year where we have been fighting to preserve Athonet, and to gain market share. And of course part of it is to do with the integration, which everyone knows is a difficult piece. And it’s easier, actually, if you think it is difficult – if you recognize it is one of the most difficult things you go through, then it becomes easier. But we accepted the offer a year ago to add growth – [and bring] the Athonet people into a safe and better home, if you like. Because [it provided] the capability to expand the business, to take it to the next level.”
So, how has it gone in the market? Because, however arms-length the corporation, and however light-touch the integration, RCR would argue Athonet has been less visible since HPE swooped – whether to enterprises, or just to pestering hacks. Verin responds: “Yes, we’ve gained more share, done more deployments. We have maintained the promise to look after our customers. Which is not always the case after an acquisition. But we have been through all of that, and understand why it’s very always the case. But we have been good enough, and HPE is a good acquirer.”
What about the mood in the private 5G market, more broadly – because there is a sense, just at this show, that the hype has outrun the reality, and there’s reckoning of sorts in the offing? “The market was overestimated, one or two years ago – so there is some down-sentiment. But as always with technology, it goes up and down, and the people that make it work, like ourselves, ensure that it goes slowly but relentlessly upwards – until the day that it’s all-up and it shows its power. We are close to that moment now,” he says.
“We think that Wi-Fi and 5G will be combined somehow in different roles. But 5G will not go away. 5G will be as big as Wi-Fi.” He pauses, and jokes: “If you write that, they’ll kill me. But that’s okay; I can take it.” And he picks up the thread again: “But why? Because enterprises have needs that are not being addressed in any other way. And we see completely new applications emerging, which didn’t exist before – like all these autonomous robots and driverless trucks, and this work we’ve been doing on air taxi logistics, and connectivity for rescue teams and navy boats.”
He adds: “So the market is good, and there to be conquered. It has had the attention of the top people in so many industries. The people that understand this technology understand how it can change things. Any CTO in any operator would love to have a clear strategy on private 5G. You see them here [at MWC] with shrinking margins; whether they can save the day is probably down to how well they address these different verticals. And how do they do that? With the same [cellular] technology, which they have been the main recipient of [traditionally].
“Because so many verticals can now do so many things they couldn’t before – because of private 5G. In mining, say; even after the first demos a few years ago, [mining companies] knew they needed to migrate to 5G – because [digital transformation] won’t work otherwise. It is the same with ports, and lots of industries… I mean, we know our technology, and know we it’s only our own little part in an interconnected technology world. But we’ve been amazed that first adopters in so many industries have come to us for guidance, and then showed us how to implement it.”
Meanwhile, HPE’s deal to acquire enterprise networking specialist Juniper Networks, expected to close in late 2024, is a bigger project, which will double HPE’s own networking business to around 31 percent of its total annual income – creating, in its own words, a “new networking leader”. HPE called it a strategic pivot to make critical fixed and wireless connectivity integral to the sale of its traditional computing portfolio, as enterprises take advantage of developing artificial intelligence (AI) tools to drive digital change – “from edge to cloud to exascale”.
At MWC, Border comments: “What we’re looking forward to is [this] position with intelligent edge and the cloud, and all the different networking technologies around, whether it’s public 5G, private, 5G, or Wi-Fi – and being able to bring those together seamlessly. The critical part is to manage all those aspects [in the same way]. An important roadmap [phase] with Athonet is to add management over time, where you can handle your Wi-Fi and private 5G together; and potentially with Juniper, and its strength in the core, to bring the service provider into that mix as well.”
We are being shuffled out of the meeting room; but Border sums up: “You know, and that way we extend the enterprise boundary to the service provider, so they can blend the things they bring, like a bunch of spectrum, with the traditional ICT industry – and those boundaries blur so services can be delivered where they belong, regardless of spectrum. Because everyone would be desirous of an end-state where all of this is seamless, right? We’re excited that service providers see a resale opportunity with our private 5G solution, but the end-goal for enterprises is that spectrum is just spectrum [and technology is just technology] – and that it’s managed and available for enterprise services together, in the same way.”
