Chasing EPS. Is it profitable to be innovative?
On Monday, March 2, I received it information on the acquisition of Aruba Networks by HP. The transaction, valued at $ 2.7 billion, is designed to strengthen HP's position in the wireless network solutions market. In this way, HP will become the No. 2 player after Cisco Systems, which is the undisputed leader in the global market. Currently, Cisco has a 52% share in WLAN sales, Aruba 13% and HP just over 4%.
The question is whether HP will be able to take advantage of the transaction opportunities since it failed to do so in previous WLAN acquisitions - Colubris in 2008 and 3Com in 2010. Another question is that Aruba is a supplier to HP competitors such as Dell. Brocade or Juniper. Will these companies continue to buy WLANs from Aruba while it is owned by HP? Nevertheless, we can say with certainty that a new strong competitor, HP-Aruba, has emerged behind Cisco's back, and with the estimated 40% WLAN market growth until 2019, Cisco's share of sales will decline in the coming years.