Could HPE’s acquisition of Juniper disrupt the networking market?

It’s official – HPE have confirmed they are acquiring Juniper Networks for around $14 billion in an “all-cash” deal. According to reuters, this price represents a premium of just over 32% over Juniper’s closing stock price on the day the deal was announced.

Since HPE (Hewlett Packard Enterprises) broke away from HP in 2015, they have been on an acquisition spree and have made a number of strategic purchase including Nimble Storage, SGI, Cray and SimpliVity. The acquisition of Juniper will be HPE’s largest acquisition to date. The deal is expected to close later this year or early 2025.

Under the acquisition, Juniper CEO Rami Rahim will lead the combined HPE networking business, reporting to Antony Neri, CEO of HPE.

Why have HPE bought Juniper?

The acquisition will add a huge arsenal to HPE’s already impressive networking business and according to HPE will “create a new networking leader with a comprehensive portfolio”.

In the annoucement by HPE they said that “HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market and provide customers and partners with a new alternative that meets their toughest demands,” | HPE CEO Antonio Neri.

HPE claims that this deal will enhance their role at the intersection of fast-growing AI trends, increase their market potential, and foster more innovation for their customers as they assist in connecting the AI-native and cloud-native domains. They also claim that it will create substantial value for their shareholders.

Combining HPE and Juniper’s complementary portfolios supercharges HPE’s edge-to-cloud strategy with an ability to lead in an AI-native environment based on a foundational cloud-native architecture

Antonio Neri | CEO | HPE

This acquisition of Juniper will position HPE as a strong end to end contender in the enterprise and mid market networking space, in a space which is dominated by the likes of Cisco, Arista and Dell.

The coming together of HPE and Juniper will esentially create a networking company that can compete in the growing era of “AI everywhere”. This will give HPE two main vantage points to compete against the network giants like Cisco, Arista and Dell.

  • HPE should have more capablity, the products and reach to target the data center network infrastructure business with a focus on AI workloads, leveraging Juniper’s expertise and track record in data center and cloud networking whilst also expanding HPE’s edge-to-cloud portfolio offering.
  • HPE will also gain the ability to leverage Juniper’s investment and maturity in AI powered network management to stregthen and innovate the overall HPE portfolio.

HPE has emphasised this aspect of the deal in their press statement, seeing this as a huge opportunity to leverage the “explosion of AI and hybrid cloud-driven business” and meet the increasing demand for technologies that are needed to connect, protect, and analyse vast amounts of data from the edge to the cloud.

How will impact the competition?

How this impacts the other networking giants will remains to be seen. Much of the success of HPE in this expanded market and where Aruba operates today will be one of great interest as they have traditionally been seen as entry level and far from entperpise class. However, HPE have the change to change all this and reset expections buy taking advantage of Juniper’s MIST and JunOS platform – perhaps breathing new life into Aruba and create a wider, extensive portfolio of products that scale to any market, office and budget but time will tell. This along with the wider HPE and Juniper porfolio could create a comprehensive and consistent offering across every market segment.

From an SD-WAN perspective, it’s also worth noting that HPE own Silverpeak and Juniper is not a market leader in that space. When we look at the wider security portfolio also, it will be interesting to see where HPE they will focus their efforts. Integration of Aruba Clearpass with Junipers’ MIST could be intriguing, or could even put them in the postion to create a competitive solution to Cisco full software defined access (SDA). Time will tell.

As the world continues to prepare, adopt and invest in the new emerging technolgies of AI, this new technology battle field will not just be aimed at the enterprise networking market. This aquisition will put new competition across all market verticles and all segments including mid market, enterprise, service provider and cloud. How this is taken by customers also remains to be seen. Some I have spoken too think that this may make existing Juniper customers re-evaluate their opens and look at the likes of Cisco, Arista or Dell again, while others think it will only bring growth to HPE.

One this is for sure – there will be increased competiton and it will keep the other networking giants on their toes. In these situations this can only be good for the customer as increased competition or a new offence usually creates innovation from all the partners in the space and creates a price compete.

What do you think about the aquisition? Feel free to tell me in the comments below.

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Who are Juniper?

Juniper is a leading provider of networking products, including routers, switches, network management software, network security products, secure access service edge (SASE) solutions and software-defined networking (SDN) technology. According to their website "Juniper is dedicated to dramatically simplifying network operations and driving superior experiences for end users. Our solutions deliver industry-leading insight, automation, security and AI to drive real business results. We believe that powering connections will bring us closer together while empowering us all to solve the world’s greatest challenges of well-being, sustainability and equality".

Who are HPE?

According to their website, "Hewlett Packard Enterprise is the global edge-to-cloud company that helps organizations accelerate outcomes by unlocking value from all of their data, everywhere. Built on decades of reimagining the future and innovating to advance the way people live and work, HPE delivers unique, open and intelligent technology solutions as a service.  With offerings spanning Cloud Services, Compute, High Performance Computing & AI, Intelligent Edge, Software, and Storage, HPE provides a consistent experience across all clouds and edges, helping customers develop new business models, engage in new ways, and increase operational performance". 

Today, HPE offers switches via its Aruba Networks business unit which they acquired back in 2015.

HPE Press Statement:
HPE to acquire Juniper Networks to accelerate AI-driven innovation | HPE

Juniper Press Statement:
HPE to Acquire Juniper Networks to Accelerate AI-Driven Innovation | Juniper Networks Inc.