HPE negotiates purchase of Juniper Networks

A major acquisition could shake up the network solutions market in the coming days. Hewlett Packard Enterprise (HPE) is negotiating the acquisition of Juniper Networks, valued at $13 billion, according to Reuters. According to a report in The Wall Street Journal, the transaction is intended to boost HPE’s Artificial Intelligence (AI) offerings and position the company strategically in an increasingly competitive market.

During a talk at the HPE Discover event held recently in Barcelona, Antonio Neri, CEO of HPE, gave a nod to Artificial Intelligence, referring to the technology as “the most disruptive of our lives” and stated that the impact of AI on companies is “not exaggerated”. Neri presented a “native AI” strategy for the company as a method of remaining relevant. Now, with the possible acquisition, HPE is showing how AI will also change the course of its own life.

According to market analysts, HPE is experiencing a growth plateau in market segments in which it is already established. Therefore, the acquisition of Juniper Networks could be a strategic move, complementing the solutions of its subsidiary Aruba Networks with those of Juniper, which already exploit Artificial Intelligence technologies. In addition, the transaction would put HPE in a better position to compete with Cisco, since Juniper Networks already does this.

Juniper Networks, which calls itself a provider of AI-based secure networks, offers the Mist AI solution, a combination of Artificial Intelligence, machine learning and data science techniques to optimise network experiences and simplify operations in the wireless access, wired access and SD-WAN domains. Juniper Network also exploits Mist AI to support customers, using it as the fundamental element behind Marvis, an AI-based virtual network assistant that offers a broad view of the environment to IT staff via a conversational natural language interface.

As with any acquisition or merger, there can be rocks along the way. Experts warn that there could be an overlap of customer accounts, which could impact the flow of revenue and sales strategies over time. Another challenge has to do with integrating a set of software products from the two companies aimed at the same segments, such as networks and data centres, and eventually eliminating certain redundant products.

The good news is that HPE is more focused on on-premise solutions, while Juniper Networks is more focused on cloud environments. This can reduce the chances of common customers.

Analysts comment that if a considerable effort is made to ensure interoperability, the combined expertise of the two companies could produce advances in areas such as intelligent network automation, self-healing infrastructures and real-time network analysis to attract new market segments.

In the third quarter of 2023, Juniper Networks reported that revenue from the segment comprising Mist AI products reached a record high, growing by almost 100 per cent year-on-year. Orders for these products also reached a notable milestone in the third quarter, totalling more than US$1 billion, less than four years after registering a total of US$100 million in the fourth quarter of 2019.

If it goes through, this deal would be HPE’s biggest acquisition since the $11 billion Autonomy deal in 2011, which has recently been the talk of the town. The company won a lawsuit in 2022 accusing Autonomy’s founder and former CFO of artificially inflating Autonomy’s revenues and gross margins. In 2008, HPE acquired EDS for a sum very close to that of the current transaction involving Juniper Networks, approximately US$13.9 billion.