HPE (Hewlett Packard Enterprise) is set to acquire Juniper Networks in a cash deal worth $14 billion in a strategic move to fortify its revenue streams.
The acquisition is poised to significantly enhance HPE’s networking capabilities, particularly in the AI-enabled networking business, aligning with the company’s vision for an edge-to-cloud future, according to insights shared by Ben Carbonneau, Senior Analyst at TBR.
Juniper Networks, recognizing the evolving business shaped by trends in AI and hybrid cloud, has already strategically positioned itself to offer simplified networking solutions emphasizing flexibility in consumption and deployment. The acquisition is anticipated to immediately boost HPE’s AI-enabled networking capabilities, aligning with the company’s edge-to-cloud strategy.
TBR predicts that Juniper’s SaaS assets will integrate into HPE’s GreenLake platform, strengthening GreenLake’s value proposition and broadening its appeal among enterprise customers. HPE’s journey towards networking prominence began with the acquisition of Aruba Networks in March 2015, signaling the company’s commitment to expanding wireless mobility solutions.
The formation of HPE’s Intelligent Edge segment in 2018 marked a pivotal organizational shift, unifying WLAN, campus and branch switching, and edge compute networking solutions under two subsegments: HPE Aruba Products and HPE Aruba Services. This strategic move resulted in deeper portfolio synergies, enabling the development of new software and services offerings.
The importance of HPE’s Intelligent Edge segment has grown significantly in recent years, outpacing traditional server and storage revenues. In the trailing 12-month period ending 3Q22, while compute and storage revenues declined, Intelligent Edge segment revenue saw a remarkable 41.6 percent year-to-year growth, constituting over 19 percent of HPE’s corporate top line.
Juniper Networks, a leader in AI-driven enterprise networking, strengthened its position through acquisitions, including Mist Systems in 2019 and 128 Technology in 2020. These acquisitions propelled Juniper’s growth in the AI-driven enterprise networking segment, with revenues growing 45.9 percent year-to-year in the latest reporting period.
HPE aims to solidify its presence as a networking industry leader by integrating Juniper’s Mist AI platform into its existing portfolio. The strategic move is expected to differentiate HPE from its infrastructure OEM peers, offering advanced AI-driven networking solutions rivaling major players like Cisco.
Furthermore, Juniper’s expertise in WAN routing and network firewalls is set to augment HPE’s capabilities, expanding its addressable market. TBR anticipates that, similar to past integrations, HPE will fold Juniper’s software and services into its GreenLake platform, enhancing its value proposition and fueling continued ARR growth.
If the acquisition is successful, HPE is poised to not only differentiate itself in the networking space but also potentially surpass competitors like Cisco in technological advancement, particularly in AI-driven networking. The deal holds significant promise for HPE’s edge-to-cloud strategy, ensuring a comprehensive and competitive networking portfolio, TBR said.
Emir Halilovic, Research Director, Telecom Technology & Software at GlobalData, said: “The acquisition will boost HPE’s presence in the telecom network equipment provider ecosystem. It completes a successful transformation of Juniper into technology provider to cloud service providers, telcos, and enterprises – with telco likely playing a secondary role for HPE networking business going forward.”
Baburajan Kizhakedath
