Hewlett Packard Enterprise Co. today announced plans to acquire Silver Peak Systems Inc., a provider of software-defined wide-area networking or SD-WAN products, in a transaction worth $925 million.

The deal represents a significant return for Silver Peak’s investors. The Santa Clara, California-based company has raised about $176 million in funding from backers that include Greylock Partners and growth equity firm TCV.

Silver Peak’s SD-WAN products help organizations build more efficient wide-area networks. They’re responsible for providing connectivity over large distances, such as between a company’s corporate headquarters and its international offices. SD-WAN technology virtualizes this network, which allows administrators to manage operations centrally and provides lower costs compared with the legacy methods historically used to enable long-distance connections. 

HPE already has a footprint in the SD-WAN segment via its Aruba subsidiary’s SD-Branch product. The acquisition of Silver Peak should significantly expand the company’s market presence. 

Silver Peak’s SD-WAN platform, Unity EdgeConnect, is available as a software-only product or as part of physical appliances. It has automation features that prioritize the traffic from important applications such as videoconferencing tools to eliminate connectivity issues. Silver Peak also offers Unity Orchestrator, a centralized console for managing large SD-WAN deployments, and Unity Boost, which helps optimize those deployments.

On top of its products, HPE is acquiring Silver Peak’s installed base of several thousand customers in more than 100 countries.

The acquisition is timely. Besides connecting remote branch offices with one another, the wide-area network is also what connects companies to their cloud workloads and what enables remote workers to access internal applications. The deal should put HPE in a better position to address these two use cases, which have become top priority for enterprises.  

“The impact of COVID-19 has accelerated the need for a highly distributed work environment — where employees need the flexibility to work from home or their traditional workplace,” Keerti Melkote, president of HPE’s Intelligent Edge business, wrote in a  blog post. “Enterprise-grade access that delivers reliable and secure access to their cloud applications is critical for both branch and home workers so they can remain safe and productive.”

HPE will use Silver Peak’s technology to extend the product portfolio of its Aruba network subsidiary. Specifically, the company plans to combine the SD-WAN technology it’s acquiring with the Edge Service Platform, an offering Aruba introduced in June that uses artificial intelligence to troubleshoot networking issues automatically.

The acquisition is expected to close by the end of October pending the usual closing conditions. 

Photo: HPE