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Last week HPE announced that its acquisition of Juniper Networks had finally cleared all its legal hurdles, most notably by the US Department of Justice. Now that the dust has settled, we’re taking a longer view on the deal.
The following is based on the official press briefing, partner feedback, analysts’ views and what end users of HPE Aruba Networking and Juniper Networks had to say.
Hewlett Packard Enterprise bought Juniper for a total of $14 billion in a cash deal based on $40 per share. Although there is overlap in the two companies’ product lines, Juniper’s Mist AI and Cloud platform should – it’s hoped – integrate with HPE’s hardware to create a compelling AI-native and cloud-native networking platform for enterprises.
As part of the deal, Rami Rahim, previously Juniper Networks CEO, will lead the new, combined networking business.
The official press release from the DoJ stated that HPE had to divest its Instant On business within 180 days to a buyer approved by the DoJ. Instant On is HPE’s line of Wi-Fi and wired networking products designed for small and medium-sized businesses, plus campus rollouts.
In addition, HPE must “hold an auction to license Juniper’s AI Ops for Mist source code”. The licence must be sold to at least two companies, and HPE has to provide support as part of the deal. However, HPE still owns the source code.
“I will say this is a new area of IT,” said Antonio Neri, President & CEO of HPE, during the press briefing, “defined by the convergence of networking, hybrid cloud and AI, and the working role is the connected fabric for both the enterprises service providers, which has never been more relevant. So with today’s announcement, we mark the beginning what I call of a new, exciting chapter for HPE.
“Our powerful combination with Juniper will enable HPE to offer an industry-leading secure cloud native AI builder portfolio, including a full modern networking stack. We’re not just building a stronger company: we establish an industry powerhouse with a vision, scale and innovation… that will serve our customers and partners better than ever.”
“As separate companies, we have delivered differentiated networking solutions to customers around the globe, and now we’re even better together, offering secure AI native networks that address the biggest opportunities across all the customer segments, from cloud providers to service providers and enterprises,” said Rami Rahim during the same briefing.
“Now customers will have access to both Juniper networking and HP Aruba networking solutions, all from a single company. I truly believe that we are now uniquely positioned to help our customers capitalise on the big opportunities of AI-native networks.”
With Rami Rahim in charge, question marks naturally arise over the direction of the new business. Who will be the primary pusher, the HPE Aruba Networking team or Juniper Networks? Here’s what Rahim had to say when asked in a press briefing on the day of the announcement.
“We’re seeing great momentum in both the Juniper portfolio as well as HP Aruba Networking, and we want to protect that,” he said. “Right now, I’m rolling up my sleeves and starting on a customer- and market-focused, thoughtful integration study, and we’re going to be guided in that work that we’re starting now by a true north, which is around secure AI native and cloud native networking.
“And very importantly, this is one I really want everybody here to recognise and understand, is that all our customers, whether they’re starting their journey on the Aruba side or the Juniper side, are going to have a path to that exciting true north. So it’s too early at this point to provide you with the specifics and the timeline, but that is the strategy that we are embarking on, and nobody gets left behind.”
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According to Rahim, they “had tremendous engagements from partners throughout the process”. But naturally that’s what HPE and Juniper would say. We also asked around for comments from HPE partners independently, and obtained this response from Howard Hall, Managing Director at DTP Group.
“Yes, it’s great to have clarity, and now that the deal is complete, we have momentum. It allows us to move forward with confidence and focus on delivering real value to our customers.”
“It means our customers gain access to a new generation of AI-native networking, which is more intelligent, automated, and secure. From faster troubleshooting and reduced downtime to consistent edge-to-cloud performance, this integration simplifies operations and prepares networks for AI, hybrid cloud, and future demands.”
“This makes HPE significantly stronger, doubling its networking business and giving it an end-to-end portfolio. With Mist AI and HPE’s edge-to-cloud expertise, it’s now a serious challenger to Cisco.”
There is a consensus that Juniper’s Mist AI platform is the crown jewel of this deal, giving HPE an edge over Cisco in cloud-native, self-healing network operations. “The HPE Aruba Networking portfolio is excellent and complementing that with Mist AI can act as an accelerant for HPE to establish itself as not just a compute leader but in networking,” wrote Zeus Kerravala, a principal analyst at ZK Research, on Silicon Angle.
Writing on Futurum, analyst Fernando Montenegro echoes this sentiment but with reservations. “The Mist AI platform provides operational advantages through machine learning-driven network management, though the DOJ licensing requirements for AIOps components create potential uncertainty,” he stated. “With over ten years of deployment data, Mist offers strong network intelligence capabilities, but translating this or other technologies into more comprehensive AI security requires additional development.”
Gimme Credit Senior Bond Analyst Dave Novosel told TechFinitive that the “acquisition of Juniper will increase the product scope of Hewlett Packard Enterprise and broaden its geographic diversification”.
And make it more profitable. “Operating margins should improve nicely since Juniper has healthier margins and cost synergies from the deal are meaningful. This will be important because HPE has been suffering from execution issues around pricing and discounting, along with restructuring charges related to the headcount reduction.”
Novosel added: “While the settlement with the DOJ and the acquisition provided some certainty as to the company’s near-term direction, the stake taken by activist investor Elliott Management introduces some concern about the firm’s intermediate term strategy.”
If Reddit can be trusted, there is hope that the acquisition of both Juniper Networks and putting Rami Rahim at the helm can only improve HPE’s networking offering. For example, the curiously named Weeweewatermelon said “HPE support for networking will improve under Rami Rahim” in the Reddit thread discussing the news.
The general feeling among the commenters on this and previous threads on the subject is that the product lines will continue to run uninterrupted for a good while. “As a current customer, I wouldn’t be too worried (for now),” wrote RiceeeChrispies, with another adding, presumably supportively, that Juniper management would run the networking division.
But there was some concern that HPE is simply too big a company. “Giant diverse companies don’t have the motivation or focus that makes the narrow focus companies successful,” wrote M0dulation. “Eventually the core Juniper people will leave and it will be just another name owned by an out of touch legacy company with old money.”
Although HPE might well point out that it’s actually a new company, only coming into existence 11 years ago.
