HPE to advance strategy by divesting Communications Technology Group to HCLTech

Since 2019, HPE has been focused on pivoting its portfolio toward higher-margin, higher-growth areas of the market, with an emphasis on product-oriented software and as-a-service technologies. To achieve this vision and position us to best meet the evolving needs of our customers, we continually evaluate, refine, and innovate our portfolio and product roadmap. 

Today, we announced the divestiture of assets from our Communications Technology Group (CTG) business to HCLTech, a leading global technology company. The combination of CTG’s systems integration, network applications, video solutions, data intelligence, and Business Support Systems (BSS) software with HCLTech’s highly digitized telecoms services practice will extend HCLTech’s leadership in the telecoms services market.

Meeting customers’ needs while advancing our strategy

We are always looking at ways to better meet our customers’ dynamic needs while we advance our strategy. In the last year, we announced major enhancements across our portfolio, expanding HPE GreenLake private cloud offerings, introducing new AI solutions, and launching new generations of HPE server and storage systems. 

We also acquired three businesses — OpsRamp, Athonet, and Axis Security – to accelerate our strategy and enhance our capabilities in IT operations, private 5G, and security, respectively.  And we announced our intention to acquire Juniper Networks, which will create a new networking leader with a comprehensive portfolio that presents customers and partners with a compelling new choice to drive business value.

Our priority is to focus on the markets most relevant to customers’ needs across edge, hybrid cloud and AI. Sometimes, this means identifying areas of our business that could be better nurtured and grown through another company or partner. 

A strategic fit with HCLTech

HPE has been transforming our telco solutions into a software-centric growth business in recent years. And while CTG is a strong, profitable business driven by talented team members, we believe its model of creating and integrating custom solutions and products will be a better strategic fit with HCLTech.  

In HCLTech, we found a partner who understands and appreciates the significant legacy of CTG, its strategy, and its potential for the future. HCLTech’s focus on accelerating growth in professional services targeted at communications service providers (CSPs) will ensure that CTG gets the investment to grow its leadership and expand into new areas of the market.

I am confident that by joining HCLTech, CTG will be a part of a combined company that will enhance value to our customers and team members as part of a telco-solutions-focused company.

This transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in six to nine months.  During that time, we also intend to hold discussions with HCLTech on an expanded strategic partnership.

Continued HPE commitment to telco sector 

I want to thank CTG team members for their service and dedication. This business has been part of HPE for more than 30 years and has played a valuable role in building our large footprint in the telecoms sector.

HPE will retain its Telco Solutions group, which is the part of the former CTG business focused on Operations Support Systems (OSS).  This group, which sits within HPE Aruba Networking, is a leader in OSS, orchestration and assurance, as well as public 5G SDM and private 5G networking and will continue to deliver value for HPE's telco customers and partners.

HPE will continue our commitment to the telecoms market. As we look to the future, we believe networking technologies will converge and HPE has a unique role to play.  We are accelerating our innovation in the telco market to help our customers modernize their networks. By focusing our efforts around key strategic areas of strength, we are well positioned to help telcos succeed in the 6G era and beyond.

I am confident we have a winning strategy that positions us to unlock more long-term growth and further differentiate us from the competition. The work we have done to pivot our portfolio to pursue growing opportunities across edge, hybrid cloud, and AI will enable us to continue to deliver innovation for our customers and maximize value for our shareholders.