Hewlett Packard Enterprise (HPE) is buying private cellular network technology provider Athonet with the goal of strengthening its private 5G network play.

HPE on Thursday announced the acquisition of Italy-based Athonet, which has been delivering 4G and 5G mobile cores since its inception in 2005. HPE plans to integrate Athonet’s software with its own to give enterprises an option to deploy Wi-Fi and private 5G services into one single monthly subscription. It will also ultimately integrate Athonet with its Aruba networking portfolio, executives said. HPE’s GreenLake cloud services platform will deliver the offering.

The purchasing company said its intends to integrate Athonet’s portfolio with that of HPE’s telco/CSP and Aruba networking units. HPE forecasts the transaction to close at the start of the third quarter of its fiscal year, pending regulatory approvals. The HPE fiscal year runs from Nov. 1 to Oct. 31, meaning that the acquisition would close in the late spring. HPE did not disclose financial details of the transaction.

Private 5G Opportunity

Tom Craig, global vice president and general manager of the HPE communications technology group, said Athonet helps HPE establish “one of the most complete private 5G and Wi-Fi portfolios” for communications service providers (CSPs) and enterprises to deploy.

HPE’s Tom Craig

“Telco customers are looking for simpler ways to deploy private 5G networks to meet growing customer expectations at the connected edge,” Craig said in an announcement. “At the same time, enterprise customers are demanding a customized 5G experience with low-latency, segregated resources, extended range and security across campus and industrial environments that complement their existing wireless networks.”

The acquisition positions HPE in the race to capitalize on growing demand for private 5G. ABI Research recently forecast the market opportunity for private wireless networks to expand beyond $96 billion by 2030, up from $7 billion in 2023. Moreover, the research firm said integration services will comprise nearly 50% of that market.

HPE + Athonet

Analysts tell Channel Futures that although HPE already offered a 5G cloud-native software core, Athonet gives deeper in-house capabilities to more quickly and directly deploy private 5G networks.

Omdia’s Camille Mendler

“Given HPE’s Wi-Fi and security assets – like Aruba – I’d say this makes a clear play to simplify management for key enterprise digital assets. And this is the kind of issue that enterprises are often bringing up to us,” Omdia chief analyst of enterprise services Camille Mendler told Channel Futures. (Omdia and Channel Futures share a parent company, Informa.)

Patrick Filkins, IDC‘s research manager for IoT and telecom network infrastructure, said Athonet can give HPE customers an improved option for deploying a private 5G network together with Wi-Fi. Filkins said that integrated portfolio could well serve an enterprise that has already done the heavy legwork of building a Wi-Fi network.

“This is a very complicated task, and one the enterprise itself controls. They don’t want to start from scratch or be forced to have someone else tinkering in their systems, so this acquisition will hopefully provide some assurance to enterprise customers that the vendors will help ensure their customers can repurpose work they’ve already done to integrate a new network technology, and hopefully new use cases,” Filkins said.

Long-Term Integration Plans

Filkins said the acquisition will immediately improve the HPE 5G core and gradually work its way into Aruba portfolio improvements. For example, HPE will integrate Athonet into the Aruba Central network management platform.

IDC’s Patrick Filkins

“Specifically, we expect HPE/Aruba to over time release follow-on solutions which help enterprises manage the two technologies seamlessly. Enterprises are not interested in deploying both 5G and Wi-Fi networks in a silo. They want a combined solution that can help tackle the integration and management issues from a single pane. This means you’ll see HPE’s telco and Aruba teams working together more closely over time,” Filkins said.

Athonet Background

What’s the skinny on Athonet?

Mendler said one might see a U.S. equivalent in Celona, despite Athonet’s age (founded 2004) compared to that of Celona (founded in 2019). Filkins added that although many vendors provide private and public LTE/5G cores in the U.S., most run their headquarters abroad. He pointed to Cisco and Microsoft-acquired Mavenir, Affirmed Networks and MetaSwitch as 5G core providers in the U.S.

“However, from a competitive standpoint, Athonet competes globally against Nokia, Ericsson, Mavenir, Microsoft Azure, Cisco, etc., among others,” Filkins told Channel Futures.

He described Athonet as “no slouch” in the wireless market. He calls the company’s customer base deep, though consisting of smaller customers. HPE said in an announcement that Athonet has performed 450 customer deployments in various verticals. Athonet’s customers include SpaceX, which uses a private cellular network in Antarctica.

Athonet Capabilities

Moreover, Filkins called the Athonet technology offerings “relatively advanced for 5G.” For example, the cloud-native 5G core meets almost all of 3GPP‘s listed functions. He also said Athonet’s core augments HPE’s 5G core offerings.

“The cloud-native part means it can be deployed fully on-site, fully in the cloud, or in a hybrid format. This should cover any scenario the customer wants. [Athonet] has specialized in selling mobile core software to…… enterprises, and smaller, regional operations for years. It knows the needs of the enterprise well,” Filkins said.

Athonet CEO and co-founder Gianluca Verin said his team looks forward to joining HPE. Moreover, he said he wants to enhance HPE’s goal of being “the leading edge-to-cloud solutions provider.”

Verin worked in support and solution engineer positions at Ericsson for eight years before starting Athonet.

Athonet’s Gianluca Verin

GreenLake

HPE’s GreenLake edge-to-cloud services platform will host the private 5G service. HPE executives have said GreenLake as-a-service consumption model will “simplify” enterprises’ entrance into 5G and lower risk.

“I think this is an important step HPE is taking. For the most part, private 5G and Wi-Fi networks have been offered as point solutions, but HPE/Aruba intend to do the ‘under-the-hood’ work to make them as integrated as possible, which is what enterprise customers want,” Filkins said.

HPE in December said 80% of its top 100 customers have adopted the GreenLake platform. The vendor is also equipping Aruba partners to deliver its network-as-a-service offering.

The Market

Private 5G networks are a hot topic all across the networking provider ecosystem. 2021 saw telcos like Verizon tout private multi-access edge compute capabilities. Last year saw the network infrastructure world make some major announcements, with HPE and Cisco both unveiling private 5G offerings.

Mendler said some consider Cisco “the bigger dog” in the market. That stems in part from Cisco’s footprint in both the enterprise space and among telcos. But she noted that Cisco and HPE mirror each other in that neither possesses a radio.

“[That] means they could make a pitch about being able to offer more choice for enterprises that want to explore building their own 5G network,” she said.

Channel Impact

Athonet’s website lists 17 key channel partners, including Wipro and Tata. The company states that all major radios, including Nokia and Ericsson, have deployed its technology. It listed AWS, Digi, Pauley, MultiTech and VMware as its technology partners. HPE prior to the acquisition did not appear on the website in the list of partners.

Mendler said she looks forward to learning how HPE will collaborate with channel partners to deliver the private 5G offerings.

“That’s the trick that will make the market take off. And note how Ericsson has recently decided to lean on Cradlepoint’s channel to sell through their propositions into the enterprise universe,” Mendler said.

When HPE unveiled a private 5G offering one year ago, an executive said HPE preferred to go to market though system integrators, telcos and service providers rather than straight to the enterprise.

HPE’s telco business serves 300 customers across the world, the company said.

HPE most recently announced the acquisition of machine learning provider Pachyderm. However, HPE had not announced acquisitions since a busy summer of 2021. Then it acquired Determined AI, Zerto and Ampol. It also purchased CloudPhysics in 2021.