On Jan. 9, Hewlett-Packard Enterprise (HPE) and Juniper Networks announced an agreement stating HPE will acquire Juniper Networks in an all-cash transaction of $40 per share, which works out to an equity share of approximately $14 billion. To put that in perspective, if that amount was paid in $100 bills, it would take numerous trucks to transport and weigh around 14,000 pounds.
Juniper Networks will be the latest in a string of acquisitions HPE has made over the last decade to bolster its position in the networking space, a list that includes Aruba Networks in 2015, Plexxi in 2018, and Silver Peak in 2020. Juniper Networks, however, itself holds significant market share in several areas of networking, such as core and edge routers, data center security, and wired and wireless LAN due to its acquisition of Mist Systems in 2019. When the sale is completed, it is expected to roughly double HPE’s networking business, transforming HPE into “a new company where networking will be the core foundation of everything we do,” according to HPE President and CEO Antonio Neri.
Throughout their press conference, Neri, along with Rami Rahim, CEO of Juniper Networks, made the case for how a combined HPE and Juniper is better poised to compete in an AI-driven future. “The biggest inflection since the dawn of the Internet itself is artificial intelligence. It’s AI,” said Rahim. “And the thing that I am most excited about with this combination is that we will be able to bring the depth and the breadth of the portfolios necessary to capture the full market opportunity that AI presents in front of us.”
Neri added, “So what we’re doing today with this proposed acquisition is to create the new core. The core is the network fabric by which we deliver hybrid cloud and AI-native services with the rest of the portfolio we have. And we deliver all these unified experience[s] to the same platform called HP Greenlake, which is a true edge-to-cloud platform.” Over time, that brings Juniper’s software and solutions on a cloud-native platform that does subscription and consumption at scale.
HPE’s partner ecosystem, which includes channel resellers, stands to benefit from the combined companies. “This combination is going to make our partners much more relevant because we’re going to make it simpler for them to combine the two portfolios and then basically meet and exceed the customer expectations,” said Neri. When later asked about where the initial opportunities lay, he illustrated the day-one opportunities to cross-sell and upsell the entire portfolio to their customers with new solutions that HPE networking alone couldn’t do.
Reaction from the partner community, already apprehensive to more industry consolidation, is mixed. The announcement sparked criticism in the popular r/networking subreddit (shocking for Reddit, I know), many who see the acquisition purely as a financial move to bolster HPE’s share price. One Redditor, in particular, expressed frustration in recently leaving Aruba for Juniper, only to find themselves back to where they started. Others, both on Reddit and X, showed disdain for HPE’s perceived track record in acquisitions and feared a decline in support.
On behalf of the Mist customers who have driven the company and products to be as successful as they are, let me pass along the same advise we gave Juniper leadership back in 2019: “Don’t ruin this.”
— Bryan Ward ❌ (@_bryan_ward_) January 9, 2024
Another common talking point across social media was feared confusion stemming from overlap in products, seeing a future of messy integrations between Aruba and Juniper product lines. Overlap, however, is not something Neri believes is an issue at all. “…. we believe there is no overlap in many ways. There [are] complementary capabilities between the Mist-driven solution and the Aruba Central, plus all the other solutions we have at scale. But on the AI side, I think we’re going to have an amazing ASIC team.”
Rahmi added, “HP, Aruba, and our Mist portfolio really address different architectures and the ability now, as a single company in the future when this closes, to satisfy all of our customers’ architectural requirements. Day one is going to be great, and in time we will use our air native to north to gradually and thoughtfully merge the portfolios into a single roadmap for our customers.”
Not all took the news as a negative. Allen Edwards, founder of Eureka Process and member of the ChannelPro Network Advisory Group, works with many IT service providers and noted one client, a product-heavy startup IT service provider, “is actually excited about it. He was already aligned with both products and sees it as making a run at Cisco.”
Edwards’ client is not alone. Dave Michaels of TalkingPointz.com, a blog focused on Enterprise IT topics, among others, posted to X seeing the potential for a combined HPE and Juniper to better take on networking’s 300-pound gorilla.
Cisco Partners: HPE/Juniper Networks Tie-Up Could ‘Light A Fire’ Under The Networking Market Leader: Hewlett Packard Enterprise’s Juniper Networks acquisition could challenge the dominance of market leader Cisco Systems, but more competition is a win for… pic.twitter.com/574Q1B5P26
— Dave Michels (@DaveMichels) January 16, 2024
Others, including HPE, seem excited about how the acquisition of Juniper greatly bolsters HPE’s solution stack for telco and 5G, where historically it has seen less success. Neri noted that Juniper has a true, cloud-native solution HPE will integrate, which combined with their AI-driven approach will provide significant value.
While the most exciting and lucrative opportunities are geared toward the enterprise, one reporter asked both CEOs how they plan to extend the opportunity in managed services to mid and even smaller businesses of HPE’s channel. Neri’s response broadened the channel to a partner ecosystem of over 200,000 partners ranging from distributors to solution integrators but shined some light on where he feels Juniper and HPE together could provide opportunities for the channel.
“In Aruba, 95% of the business goes through the channel. So, think about that scale now, either a consistent program approach with the rest of the Juniper portfolio. So for us is a massive opportunity and on top of that, as we said earlier, we have this managed service provider arrangements that obviously in there as a service model will become even more relevant and that’s a benefit directly to the Juniper team because those are relationships they may have already with their MSPs, but we have that as a service. [This] allows us to expand that, grow the business through those. And HPE, one of the strength[s] they have is commercial and mid-market.”
In there he talked about partnering with major telco providers, so HPE is clearly thinking along the lines of enterprise, larger business opportunities in infrastructure, cloud, and AI, and (as Neri hammered home numerous times) shareholder benefit out of the gate. However, noting HPE’s strength in the commercial mid-market should give SMB resellers, at the very least, a little something to be excited about.
