In the early days of the COVID-19 coronavirus pandemic, networking specialist Aruba Networks was heads-down-focused on helping its partners and customers set up new networks on the front lines of the pandemic and empowering employees all over the globe to work from home. Now, the company has its sights set on the future.
Specifically, Vishal Lall COO of Aruba, said he is harnessing the trends that COVID-19 has accelerated, like edge computing and the as-a-service model, as ways to grow the business. There‘s no denying that the pandemic has changed demand for IT solutions and many customers are eyeing flexible consumption models and solutions, rather than products, as ways to get the technology they need right away. Aruba has always been a channel-friendly provider and the current circumstances are only driving home the importance of the partner ecosystem, Lall told CRN.
A year and a half into his role as COO of Aruba after serving as chief strategy officer for HPE, Lall spoke with CRN about what he is doing to scale Aruba into a US$5 billion company, its plan for Silver Peak, and how partners fit into the equation. Here are excerpts from the conversation.
How has the coronavirus changed demand for Aruba?
We see behavioral changes in the ways people will work, but long term, we see demand being very consistent. Where there is networking and processing at the edge—we have very strong confidence that piece is going to continue. However, if you look at the short term, there has been some slowdown for the entire market, but that being said, we‘ve been through nearly two quarters of the pandemic and we are starting to see areas [of strength] and areas of pressure. The pressure that we see is much more pronounced in certain verticals, like hospitality and travel. Industries like health care and SLED are performing very well. Some of the large contracts we got last quarter were driven by public sector spending. From an industry perspective, it’s a tale of two cities. Certain industries are much more impacted than others. If you look at customer segments, enterprise is doing better than SMB. But again, based on how we thought SMBs would do back in March and April, they’re doing better. So, more strength than we thought back in March and April.
I also think it‘s very interesting to look at impact by geographies. Certain geographies have been much more impacted. India, Brazil, and parts of the South Pacific and Southern Europe definitely saw much more pressure from a revenue perspective. However, if you look at other geographies, like North America, it’s much stronger. Last quarter we grew 12 percent in North America. So yes, there’s pressure in certain areas and we are looking at the market by vertical, geography and customer segment and that is how we are executing. But my take is that we are starting to see some strengths come back already in our business and in the market overall.
What changes are you making to scale the Aruba business?
We took a little bit of a step back this year as an industry because of COVID. And for us, a lot of the focus for the last six months was around how do we bounce back from COVID and make sure our employees are safe and our customers are getting what they need. In the early part of the shutdown, many employees were trying to work from home, we were focusing a lot on our health-care clients, and we kind of pivoted to go where customers wanted us to go.
We are trying to scale across every area, whether it‘s the way we go to market, to the way we address the channel, to the way we address service providers and alliance partners. One way to scale is to add head count for every few million dollars of revenue, but that’s not how we scale. We need to scale through our partners, so that’s one [way]. The second being, just from an operations perspective, we are a company that has a lot of tribal knowledge, so what we are doing is putting [many] more processes in place that are scalable, where people can work across geographies and segments. We are building centers for excellence, for example, from an execution perspective. Our supply chain has been very resilient. We are adding more resiliency and flexibility in terms of where we produce, how we stock and distribute. So, across every aspect of business, we are adding scalability. If you look at wired and wireless, we are a leader, and now, we just added SD-WAN to that, so from a product perspective, I think we are in very good shape. What we are doing to scale our go to market and scaling operations will help us expand from US$3 [billion to] US$5 billion, which is the next milestone for our management team. That’s what I’ve been focused on for the past year now.
How critical are partners to these efforts to scale the business?
Partners are absolutely critical. The way I think about it, there are the channel partners—the VARs—and then there are the telcos or service providers with whom we go to market. In many geographies, the partner route to market is very strong. The third element to that is the systems integrators. As we are getting into larger and larger accounts, we are partnering more with SIs. All three [partner types] are absolutely necessary. If you think about the solutions we have, we‘re going into cloud managed offerings very aggressively, we introduced our CX switching platform that targets the large enterprise much more aggressively, and we have [HPE] GreenLake. We are building solutions that target enterprises and larger accounts, so we absolutely need to partner with these kinds of partners to scale up and provide a value proposition for our customers.
Are you seeing high demand for flexible consumption models?
[Managed services] are a key element. Customers are looking for solutions, and secondly, they are looking for solutions they can consume however they want. … All our products are bundled together as a solution, and they also have services in [the bundle] sometimes, the services are ours, sometimes, it‘s our partner’s. A lot of companies are preserving cash and looking for more and more flexible billing or consumption models, so we are starting to see a lot more demand for that. We are in the best position there, especially with our experience and expertise with GreenLake, which we can extend into connectivity as a service, which is something we are doing right now.
It‘s early now, but the potential is immense. We are definitely seeing the benefit of things like GreenLake and growth on that side of the business, so we are excited about the as-a-service opportunity, which I think is huge. It’s a big part of our strategic priorities next year to drive that growth.
Last year, you mentioned Aruba would be rolling out new edge solutions. How has the progress been on this front?
It‘s been going very well. The way we are doing it is we have a cloud platform—Aruba Central—and before Aruba Central there was a platform called Aruba Cloud Platform. One of the things we’ve done is basically expanded that across the rest of the company so that [things like] compute and storage can be offered to customers as a full package—a cloud managed offer. We are very focused on that and driving more and more on edge solutions. That’s where the future is.
When we talk about customer side, hotels have been slow, but in areas like manufacturing and hospitals, there‘s lots of opportunities there. There’s lots of opportunities for us to drive that faster. To your point, though, for the first few months, we were focused on making sure we were meeting the near-term customer needs, but the edge is where we are focused now and we have made a lot of progress on that cloud platform in the last six months.
How is the integration planning for the addition of Silver Peak going?
That acquisition closes sometime later this month. We are in an integration planning phase right now and we are still hands-off—we are operating as two separate companies. We are talking now more about what happens after we close [and] it‘s going really well. The teams are very excited every time we meet, and I think the culture fit is fantastic.
Their [SD-WAN] product is one of the leaders in the [Gartner Magic Quadrant]. We will see a lot of synergies from a revenue perspective. We are excited about this and their performance during COVID has been very strong. I‘m really looking forward to the close in a few weeks’ time.