Impact of HPE’s US$14 billion buy of Juniper huge: Dell’Oro Group

Describing it as a “tectonic shift” for the networking industry, industry analyst Mauricio Sanchez has predicted that yesterday’s US$14 billion acquisition of Juniper Networks by HPE will clearly extend the latter’s reach into distributed denial of service (DDoS) attack protection offerings, firewalls, cloud workload security, and distributed cloud networking markets.

Sanchez, senior director of enterprise security and networking research at Dell’Oro Group, wrote in an advisory released late last night that “Juniper has long been known as a premier service provider router company, and, more recently, as a darling in the enterprise networking space with the AI-powered MIST WLAN solutions.

“HPE has been in the networking industry even longer, going back to the 1980s, and most recently, a well-regarded enterprise networking player with Aruba campus solutions. However, both firms have a wider portfolio that spans the network security and SASE/SD-WAN technology landscape.”

He said key strengths of the deal are the fact that Juniper brings a number of network security technologies that HPE lacks, and that its reputation in the cloud and comms service provider space will help HPE’s overall credibility.

The major weakness is that “Juniper’s network security market share is small compared to the big three of Cisco, Fortinet, and Palo Alto Networks.”

According to a release issued by the two companies, the acquisition – an all-cash transaction of US$40 per share – is “expected to double HPE’s networking business, creating a new networking leader with a comprehensive portfolio that presents customers and partners with a compelling new choice to drive business value.

“The explosion of AI and hybrid cloud-driven business is accelerating demand for secure, unified technology solutions that connect, protect, and analyze companies’ data from edge to cloud. These trends, and AI specifically, will continue to be the most disruptive workloads for companies, and HPE has been aligning its portfolio to capitalize on these substantial IT trends with networking as a critical connective component.”

Upon completion of the sale, which is expected to close either the end of this year or early 2025, Juniper chief executive officer (CEO) Rami Rahim will lead the combined HPE networking business and report to HPE president and CEO Antonio Neri.

Neri, in the release, said the acquisition 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.

“This transaction will strengthen HPE’s position at the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further innovation for customers as we help bridge the AI-native and cloud-native worlds, while also generating significant value for shareholders.”

During a press briefing this morning, Rahim said, “those who know Juniper know that we were born in the era of the internet, and we build the products that help the internet scale to what it is today. Fast forward to today, the biggest inflection since the dawn of the internet itself is artificial intelligence, it is AI.

“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. I think that combination is going to be incredibly powerful to solving our customers most compelling AI needs in the market.”

Neri added that the combination of the two companies, “will not only will make us more relevant, it’s going to disrupt the networking market, and it’s going to deliver significant value to our combined shareholders.”

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Paul Barker
Paul Barker
Paul Barker is the founder of PBC Communications, an independent writing firm that specializes in freelance journalism. He has extensive experience as a reporter, feature writer and editor and has been covering technology-related issues for more than 30 years.

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