Aruba tight-lipped on HP takeover rumours

Vendor quizzed during Q2 earnings call during which it talks up channel success

Aruba Networks has kept its mouth firmly shut on rumours HP is going to snap it up as it talked up its channel credentials on a Q2 earnings call.

Earlier this week, Bloomberg reported that HP was in talks to acquire the networking firm and said a deal could close as early as next week.

But on a Q2 conference call – when the question was high on analysts' agenda – Aruba's chief executive Dominic Orr kept schtum.

"Obviously, we cannot comment on speculations and rumour," he said. "We are here to discuss our results for Q2, which we believe we've executed very well, and the prospect of our Q3. So thank you for your questions, but we cannot comment."

For the three months to 31 January, GAAP net profit at Aruba reached $5.7m (£3.70m) – compared with a $10.7m loss a year ago – on revenue which shot up 21 per cent over the same period to $212.9m.

The lion's share – 63 per cent – of its sales came from the US, where revenue rose 18 per cent year on year, while EMEA, which accounted for a fifth of its sales, saw revenue grow more than a quarter – 26 per cent – over the same period. Asia-Pacific sales were up 20 per cent annually, representing 14 per cent of total revenue.

Last month, Aruba kicked off an SMB push in the UK by launching a new partner programme for EMEA following a US pilot.

On the earnings call, which was transcribed by Seeking Alpha, Orr admitted his firm was late to the SMB party but said its channel push was helping to get things going.

"[In] the SME market, we are a latecomer, admittedly," he said. "The good thing about being a latecomer is every dollar we gain is a market share gain. But I would say in the SME market, you pretty much see everybody and it is really not a technology issue, it's [about] ease of installation, availability of programme, ease of ordering and very good online support also.

"We are very happy to have a value-added distributor... to address the combination of that issue. It is a generally very, very broadly competitive market. Now with our outreach and with our channel support, finally, we're moving the needle there, and I'm very encouraged [by] that element of our go-to-market strategy being a net market share winner for us."

Between 90 and 95 per cent of Aruba's business goes through its channel partners, with the remainder getting snapped up by its direct team.

Orr said the SMB push, which coincided with the opening of a new partner-training facility in Cork, was "rendering very well".

"Partners operating in that model have doubled year over year – the business is small, but growing very fast."