Hewlett Packard Enterprise (HPE) made waves earlier this year with its acquisition of Athonet, which sets the vendor up to make a stronger run into the private 5G space and to help operators better monetize their 5G investments.

The Athonet deal was a coup for HPE in that it bolsters several parts of the vendor’s lineup. HPE said it will integrate the Athonet software into its Aruba private networking portfolio that should help boost Aruba’s SD-WAN efforts.

“SD-WAN has been important to our enterprise customers and it’s my expectation that it will be as effective in the private cellular domain as it has been in the rest of the wireless domain,” HPE Wireless CTO Stuart Strickland told SDxCentral about the Athonet deal.

It also boosts HPE’s growing private network ambitions.

Tom Craig, global VP and GM for HPE’s Communications Technology Group (CTG), told SDxCentral in a recent interview that Athonet’s assets will help HPE better partner with operators to take advantage of private network opportunities. He explained that opportunity was something operators lost during the move to 4G LTE services a decade ago.

“I think that there is a massive opportunity for the telco operators and I passionately believe they should be the people that benefit and monetize the opportunity of private 5G,” Craig said. “That’s how we want to position HPE, to be a partner and work with them to build opportunity, which was the logic as to why we decided to buy Athonet.”

Craig joined HPE last year, having previously served in executive roles at large-scale telecom operators like Vodafone, BT, Ooredoo and Millicom. HPE CFO Tarek Robbiati at that time tied Craig’s hire toward the vendor’s push into the 5G space. Craig said this experience colored his view on how HPE can help operators.

“Post pandemic when the world was never more reliant on telecommunications in the history of the planet to function both as consumers and business, headline growth was 0.5%,” Craig said. “What I saw on the other side of the table and the companies I worked for are real struggles to find and validate new sources of growth while at the same time writing eye-watering checks for 5G spectrum and complete infrastructure overhauls on upgrading to 5G. Everyone is kind of scratching their heads saying, how do we incrementally monetize this? How do we create new sources of growth?”

Craig said HPE is focused on helping those operators monetize those operations by streamlining their core infrastructure operations and providing ready-to-deploy revenue-generating services. This also includes greater use of automation to reduce “too many manual touch points in how these processes are performed right now.”

HPE has been integrating these efforts into the telecom space. This includes a move last year to add radio access network (RAN) automation capabilities to its Open RAN Solution Stack, tapping into artificial intelligence (AI) and machine learning to provide zero-touch management and orchestration of multi-vendor RAN infrastructure.

Analyst firm Analysys Mason noted this level of automation will be important for operators and vendors to simplify the private networking space.

“The current model of private networks, where the enterprise – or one of its suppliers – needs to put together products from five or more different parties is not sustainable,” Analysys Mason noted in its report, specifically citing the HPE/Athonet deal as a move toward that simplification process. “The question then is what ‘simpler’ looks like – it could be that private networks remain independent, but all the elements are provided together, or it could be that private networks become an extension of another market, such as cloud, local area networks/Wi-Fi or public cellular networks.”

These types of moves are part of a process to help operators leverage their vendor partners to develop applications that can differentiate 5G services and generate revenues.

“The wave of expectation of growth and return on investment in 5G is dropping on [business-to-business] divisions and they're seen as the opportunity for incremental monetization, [and] I passionately believe they are right,” Craig said. “But in doing that, I think that they need to think in a different way about how they monetize and position their private 5G solutions.”

The private 5G market itself is still finding its footing, but analysts have repeatedly touted its long-term financial benefits.

Analysys Mason predicts the private 5G market will grow at a 65% compound annual growth rate between 2021 and 2027, hitting 39,000 deployments at the end of that timeframe. That growth will be on the back of investments it predicts will grow from $1.5 billion in 2022 to $7.7 billion by 2027.

“This is a large figure in isolation, but appears small when compared to the spending on public network infrastructure,” senior analyst Ibraheem Kasujee wrote in the Analysys Mason report. “However, private networks could act as an important new revenue stream for the mobile industry in the longer term and will also be an important bellwether of the success of 5G in the industrial sector.”

Craig also touted the opportunity for operators to own the edge ecosystem based on their already in-place physical assets to support low-latency services and increasingly complex data sovereignty issues.

“I think the carriers are super well-positioned if they execute to exploit that because they have the edge, they have the potential to have the highest availability, lowest latency data centers in the world,” Craig said. “At the same time the hyperscalers have struggled to deliver resiliency, security and latency at the edge the way they have done very successfully in the public cloud. We think HPE along with carriers can really create some very interesting new opportunities at the edge.”

While ink on the Athonet deal is still drying, Craig did hint the vendor was already working on integration plans that will benefit private networks and enterprise needs for connecting the network edge. This will take advantage of HPE’s substantial presence in the enterprise Wi-Fi arena, which Craig said stood at more than 22 million enterprise access points.

“In some cases they may want to use Wi-Fi 6, in some cases they may want to use private 5G, and there are very specific areas and application where one is stronger than the other,” Craig said. He highlighted less-expensive equipment prices tied to Wi-Fi, while private 5G can support deployments in more challenging radio frequency environments.

The key is to tie those connection together on the back-end.

“We think both will coexist probably forever, and the HPE promise to customers is if you come with us, either through CTG, through the carriers or you're an enterprise that contracts through Aruba for our network-as-a-service offers and Aruba Central, then it will be a seamless experience of mixing both,” Craig said. “You can have policy, security and roaming between Wi-Fi 6 and private 5G seamlessly deployed. But we think for the operators it's a fantastic growth opportunity.”

HPE recently partnered with Cisco to produce a report for the Wireless Broadband Alliance bolstering that link between private 5G and Wi-Fi. It highlighted four roles that new and existing Wi-Fi infrastructure can play as it mixes with private 5G.

HPE is banking on these efforts to unlock that bountiful financial return for operators.

“I think that the success of the telecom operators in genuinely being a source of new product launches and service innovation, including being a leader and exploiting compute at the connected edge, they have to do it with partners,” Craig said. “They have to leverage partners, and I think HPE along with operators and some other industry consortiums is the way new forms of service innovation and competition will come about.”