Hewlett Packard (HPE) to Acquire Israel's Axis Security
Hewlett Packard Enterprise HPE recently inked a definitive agreement to acquire Axis Security, a cloud security provider. Also, it extended its edge-to-cloud security capabilities by offering a unified Secure Access Services Edge (SASE) solution that will meet the growing demand for integrated networking and security solutions delivered as-a-service.
The buyout, which is anticipated to conclude in second-quarter fiscal 2023 subject to customary closing conditions, will fortify HPE Aruba’s SASE solutions with integrated cloud security and Software-defined Wide Area Network (SD-WAN) in a single offering. Combining HPE Aruba’s existing SD-WAN and network firewall solution with Axis Security’s cloud-based offerings, the company will provide a complete edge-to-cloud SASE solution, which will ensure Zero Trust security controls applicable to both partners and devices on campus, branch, home, or anywhere.
Axis Security’s cloud-based Security Service Edge solution, Atmos, delivers authenticated user access to private applications at the network edge, a secure web gateway to safeguard user access to the Internet and a cloud access security broker that provides secure in-line access to software-as-a-service apps and Digital Experience Monitoring to provide insights into user experience. The solution aims to enhance application performance and support increased network security with an increase in the number of remote users and enterprises continuing to perform cloud migration.
HPE Aruba Networking’s executive vice president and general manager, Phil Mottram, stated "The convergence of Aruba and Axis Security solutions will transform edge-to-cloud connectivity with a comprehensive SASE solution that provides enterprises with the highest levels of security for both Internet of Things (IoT) devices and all users’ access across geographically distributed locations."
The integrated HPE solution is likely to be available for customers in third-quarter fiscal 2023.
Hewlett Packard Enterprise Company Price and Consensus
Hewlett Packard Enterprise Company price-consensus-chart | Hewlett Packard Enterprise Company Quote
Back-to-back Buyouts
HPE has been pursuing acquisitions to focus more on high-margin hybrid IT models that leverage on-premises and cloud-computing power. Last month, the company signed an agreement to acquire private cellular technology provider, Athonet, to expand its overall private 5G offerings to both enterprises and communication service providers (CSP).
Incorporating Athonet’s technology into its existing CSP and Aruba networking enterprise offerings, HPE intends to create a private networking portfolio that accelerates digital transformation from edge-to-cloud.
In January 2023, the company acquired Pachyderm, a San Francisco-based startup delivering software, based on open-source technology to automate reproducible machine learning pipelines that target large-scale AI applications.
Integrating Pachyderm’s reproducible AI solutions in a single integrated platform to provide an advanced data-driven pipeline, that automatically refines, prepares, tracks and manages repeatable machine learning processes, are used throughout the development and training environment, Hewlett Packard expanded its AI-at-scale solution portfolio. This enabled the company to go for quick development and deployment of large-scale AI applications with benefits like data lineage, data versioning and efficient incremental data processing.
Hewlett Packard views AI, Industrial IoT and distributed computing as the next major markets. In 2021, the company acquired four businesses, Ampool, Zerto, Determined AI and CloudPhysics, which expanded its capabilities and product portfolios in the fast-growing cloud space, including software-defined networks and converged and hyper-converged infrastructure.
HPE has been benefiting from strong executions in clearing backlogs, improved supply chain and increased customer acceptance. The company’s efforts to shift focus to higher-margin offerings like Intelligent Edge and Aruba Central Hyperconverged Infrastructure are aiding its bottom-line results. However, execution challenges faced by the company in Intelligent Edge segment around Aruba sales are hurting its top-line growth.
Zacks Rank & Stocks to Consider
Hewlett Packard currently carries a Zacks Rank #3 (Hold). Shares of HPE plunged 3.1% in the past year.
Some top-ranked stocks from the broader Computer and Technology sector are Airbnb ABNB, Baidu BIDU and Fabrinet FN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
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The Zacks Consensus Estimate for Fabrinet's third-quarter fiscal 2023 earnings has been revised 7 cents upward to $1.90 per share over the past 30 days. For fiscal 2023, earnings estimates have moved north by 24 cents to $7.71 per share in the past 30 days.
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