Cisco CEO: ‘A Lot Of Noise’ On HPE-Juniper Deal But 'It's A Little Early'

Cisco CEO Chuck Robbins weighed in on the pending HPE-Juniper Networks megadeal this week, saying it was still a little soon to see how the deal would impact the networking industry. Wireless networking specialist Extreme Networks CEO said that the deal is shining a light on the growing value of enterprise networking.

Hewlett Packard Enterprise's plans to buy fellow networking provider Juniper Networks is putting some tech leaders on the edge of their seats to see how the deal plays out in the wired and wireless networking market.

The $14 billion acquisition -- which is expected to close in late this year or early 2025 -- would give HPE the additional AI networking muscle it needs to go head-to-head with the likes of Cisco Systems. While the combination would create room for direct competition with Cisco’s wireless portfolio, Cisco Chair and CEO Chuck Robbins said that it's still too soon for customers to be asking about megadeal.

"The one area where they have meaningful overlap is in wireless and I don't know if there's any connection to the fact that we had a 50 percent increase in $1 million-plus wireless deals sequentially. So, it's hard to say," he said during the company's Q2 2024 earnings call on Wednesday evening. "There is a lot of noise in … the industry, so, I think it's a little early."

[Related: Cisco Partners: HPE/Juniper Networks Tie-Up Could ‘Light A Fire’ Under The Networking Market Leader]

But Cisco during its most recent fiscal quarter saw "greater degrees of caution" related to product ordering, which lowered product revenues. Cisco’s Networking segment, which includes its wireless and core switching and routing businesses, is typically a strong segment for the company and one of its main growth drivers. In Q2 2024, however, Networking posted a 12 percent decline with revenues of $7.08 billion year over year. The company said that the quarter was impacted by declines in switching, wireless and optical networking, driven primarily by weakness in the enterprise, service provider, and cloud markets.

Cisco Systems is currently valued at $199.35 billion. By comparison, HPE is valued at $19.84 billion and Juniper Networks' market cap is $11.92 billion, according to the Nasdaq.

The prospect of the HPE-Juniper deal is "exciting," according to one solution provider executive that requested anonymity.

"Assuming that what actually happens is what they say is going to happen and that [Juniper CEO Rami Rahim] is going to lead the technology, vision and direction, I think it's going to be great for each company because he's really led the entire AI-based architecture," the executive said.

The Midwest-based solution provider, which partners with both Cisco and Juniper Networks, believes that an HPE-Juniper tie-up will undoubtedly inject more competition into the networking market. The deal will give HPE a holistic data center solution, including storage and server assets, as well as the full wired and wireless networking solution, the partner said.

'I'm cautiously optimistic that it's going to be a win for [HPE and Juniper]," the executive said.

Extreme Networks, a smaller but mighty player in the wired and wireless market, has a current market valuation of $1.58 billion. The fellow networking specialist's President and CEO Ed Meyercord in an email to CRN said that an acquisition the size of the planned HPE-Juniper deal demonstrates the growing value of enterprise networking.

"This is reflected by the growth of the industry over the past several years. It will be interesting to see how the two companies integrate, which technology takes precedence, how they integrate/make decisions with product portfolio overlap and what that means for customers," he said.

Morrisville, N.C.-based Extreme Networks differentiates in the networking space by coming to market with its universal hardware and singular cloud management platform, also known as its "One Network, One Cloud" approach, to help customers lower operational costs and improve network security. The company, Meyercord said, is focused on building out its consistent architecture that simplifies network deployment and management, an area in which the larger wireless players have struggled.

The company during its most recent fiscal quarter posted revenues of $296.4 million, down 6.9 percent year over year, which Extreme attributed to distributors and partners lowering inventory purchases coming off of the COVID-19-induced supply chain constraints. The company expects these purchases to pick up during its current fiscal quarter.

Extreme, alongside Cisco, Huawei and HPE Aruba and Juniper Networks, was named a leader in the most recent Gartner Magic Quadrant for Enterprise Wired and Wireless LAN Infrastructure report.