Direct Answer
Hewlett Packard Enterprise is the enterprise technology half of the original HP, selling servers, storage, and Aruba networking while pivoting toward recurring revenue through its GreenLake as-a-service platform and navigating competition from hyperscalers and cloud infrastructure trends.
Hewlett Packard Enterprise (HPE): Servers, Networking, and Hybrid Cloud
Company Snapshot
| Ticker | HPE |
|---|---|
| Exchange | NYSE |
| Sector / Industry | Information Technology / Technology Hardware, Storage and Peripherals |
| Headquarters | Houston, TX |
| Founded | 2015 (spun off from HP Inc.; Hewlett-Packard origins 1939) |
| Revenue (FY2024 approx.) | ~$31B |
| CIK | 0001645590 |
| SEC EDGAR | View filings |
What does Hewlett Packard Enterprise do?
Hewlett Packard Enterprise (HPE) is a global technology company that delivers enterprise IT infrastructure, software, and services. It was created in November 2015 when the original Hewlett-Packard Company separated into two independent public companies: HPE (enterprise-focused) and HP Inc. (HPQ, personal computing and printing). HPE inherited the servers, storage, networking, and enterprise services businesses.
Under CEO Antonio Neri (since 2018), HPE has been transforming from a hardware-centric company toward a hybrid cloud, edge computing, and as-a-service model anchored by the GreenLake platform. The company's fiscal year ends in October.
Business segments
- Server (~50-55% of revenue): ProLiant and Apollo servers for standard enterprise workloads, Cray/SGI high-performance computing (HPC) for scientific, government, and AI workloads, and Alletra storage servers. Server demand spiked with the AI infrastructure buildout as HPE supplies GPU-accelerated compute platforms for training and inference workloads.
- Hybrid Cloud (~20%): HPE Primera, Nimble, and Alletra storage systems; HPE GreenLake (consumption-based IT as a service); data services software; and private cloud infrastructure. GreenLake gives enterprises on-demand scalability of a public cloud on their own hardware.
- Intelligent Edge (~15%): Aruba campus switches, Wi-Fi access points, SD-WAN, and zero-trust network access (ZTNA) solutions. Enterprise wireless LAN is a growing market as workforce distribution increases Wi-Fi infrastructure requirements.
- Financial Services (~10%): Leasing, financing, and asset management for HPE and multi-vendor IT equipment. Provides a bundled solution allowing customers to pay for hardware over time.
Juniper Networks acquisition (2024)
HPE announced the acquisition of Juniper Networks in January 2024 for approximately $14B ($40 per share). Juniper is a networking equipment company with strong positions in data center switching (QFX series), campus and branch networking, and routing (MX series) for service providers. Juniper also brings the AI-driven Mist wireless LAN platform and its Marvis AI virtual network assistant.
The acquisition, pending regulatory review in multiple jurisdictions as of mid-2024, would nearly double the size of HPE's Intelligent Edge networking business and create a more comprehensive end-to-end networking portfolio to compete more directly with Cisco. Regulatory scrutiny focused on the combined entity's position in certain networking market segments.
AI server opportunity
The surge in AI infrastructure investment from 2023 onward created meaningful demand for HPE's high-performance compute platforms. HPE's Cray supercomputers (acquired through Silicon Graphics International and Cray Inc.) have been deployed in major AI research installations, and the ProLiant Gen11 server line supports NVIDIA GPU configurations for enterprise AI workloads. HPE's AI system revenue grew substantially in fiscal 2023-2024, providing a tailwind to the Server segment above the traditional enterprise compute cycle.
Frequently asked questions
How does Hewlett Packard Enterprise make money?
HPE earns revenue through four primary segments: Server (roughly 50-55% of revenue, selling x86 and high-performance compute servers), Hybrid Cloud (roughly 20%, storage systems, cloud software, and HPE GreenLake consumption-based IT services), Intelligent Edge (roughly 15%, Aruba networking products including campus switches, wireless LAN, and SD-WAN for enterprise and mid-market customers), and Financial Services (roughly 10%, leasing and financing IT equipment). HPE also derives recurring revenue from software subscriptions, support contracts, and the GreenLake as-a-service model.
What is HPE GreenLake and why is it important?
HPE GreenLake is the company's edge-to-cloud platform that delivers IT infrastructure as a service with a consumption-based billing model -- customers pay for what they use rather than purchasing hardware outright. GreenLake allows enterprises to get the economics of a public cloud (pay-per-use, no large upfront capital expense) while keeping infrastructure on-premises or in colocation facilities for data sovereignty, latency, or compliance reasons. HPE positions GreenLake as a hybrid cloud alternative to AWS, Azure, and Google Cloud. The platform generates more predictable, recurring revenue and higher customer lifetime value than traditional product sales.
What is the origin of HPE and how did it split from HP Inc.?
Hewlett Packard Enterprise was created on November 1, 2015, when the original Hewlett-Packard Company completed a separation into two independent publicly traded companies. HPE received the enterprise-facing businesses: servers, storage, networking, and technology services. HP Inc. (HPQ) received the personal computing and printing businesses. The split was driven by the belief that focused companies could operate more efficiently and respond faster to their respective markets than a sprawling combined entity. The original HP was founded in a Palo Alto garage by Bill Hewlett and Dave Packard in 1939.
What is Aruba Networks and how does it fit into HPE?
Aruba Networks is HPE's enterprise networking division, acquired by the original Hewlett-Packard in 2015 for approximately $3B before the HP split. Aruba specializes in wireless LAN (Wi-Fi infrastructure), campus networking switches, and SD-WAN (software-defined wide area networking) solutions for enterprise and mid-market customers. Aruba is a leading player in enterprise Wi-Fi and competes with Cisco Meraki, Juniper Mist, and others. The Intelligent Edge segment built around Aruba has been one of HPE's higher-growth, higher-margin businesses, benefiting from the shift to distributed work models and increased enterprise wireless density.
What are the main risks for HPE investors?
Key risks include: intense competition in server markets from Dell Technologies, Lenovo, and Supermicro, plus hyperscalers building their own hardware; commoditization pressure in server hardware driving margin compression; the long-term structural shift of workloads to public cloud reducing on-premises infrastructure spending; GreenLake adoption pace relative to capital deployed in the model; execution on completing the Juniper Networks acquisition (announced 2024 for approximately $14B) and integrating its networking portfolio; and macroeconomic sensitivity as enterprise IT capital budgets are typically cut in downturns.