Cisco Partners: HPE/Juniper Networks Tie-Up Could ‘Light A Fire’ Under The Networking Market Leader
“If HPE can deliver this cohesive, integrated, disruptive technology to the networking world and bring it to light faster than Cisco can, then yes, they will disrupt Cisco and Cisco should be concerned about that,” one HPE and Cisco partner tells CRN.
Hewlett Packard Enterprise announcing its plans to spend a cool $14 billion on fellow networking provider Juniper Networks earlier this week could challenge the dominance of market leader Cisco Systems as HPE becomes a more formidable competitor, channel partners say.
“I think this is definitely going to put up strong competition against Cisco,” said Lane Irvine, network business solutions director for Long View Systems, a Calgary, Alberta-based MSP.
Long View Systems, both a Cisco and HPE partner, has seen some of its customers make the move from Cisco to HPE Aruba because of pricing and specific offerings, such as HPE’s GreenLake platform.
“It’s not going to happen right away, but over the course of the next three to five years, I think it really positions HPE as a much stronger competitor to Cisco, and Cisco will have to showcase their AI innovations as well. Cisco is doing a ton of work in AI as well, so they’ll have to show how their AI provides a better experience for users,” said Irvine (pictured above).
Cisco’s own networking business lately has grown “stale” as the tech giant has focused its attention on other areas of the portfolio, such as security, according to one Cisco partner who spoke to CRN under the condition of anonymity.
The HPE-Juniper deal, however, could create urgency within Cisco to innovate within its networking portfolio, Long View’s Irvine said.
“I think that this will definitely light a fire a little bit under them,” he said. “Certainly, AI is going to be critical in this space. We’re seeing Cisco focus more on the security side of AI. I think AIops will be a big push for Cisco and an area they’ll really have to invest in because HPE and Juniper are going to come to market with a very strong offering,” Long View’s Irvine said.
Cisco declined to comment on the HPE-Juniper deal and did not respond to CRN’s request for comment on the acquisition’s potential impact on the market before publication.
Revenue-wise, HPE Aruba and Juniper combined pull in smaller figures compared to Cisco’s monumental networking business. HPE Aruba — a very high growth area for HPE — together with Juniper, however, could get closer to Cisco’s networking business.
During Cisco’s most recent fiscal quarter, the tech giant’s networking segment, which includes its core switching and routing businesses, posted revenues of $8.82 billion during the quarter, a 10 percent incline year over year. Cisco said these revenues were buoyed by strength in the company’s popular Catalyst and Nexus switches, as well as strength in campus and data center networking, which offset declines in wireless.
Comparatively, HPE’s Intelligent Edge revenue, which includes its Aruba business, was $1.36 billion during the company’s most recent fiscal quarter, up a notable 41 percent from the prior-year period.
“If HPE can deliver this cohesive, integrated, disruptive technology to the networking world and bring it to light faster than Cisco can, then yes, they will disrupt Cisco and Cisco should be concerned about that,” said the unnamed Cisco partner.
Should the HPE-Juniper deal close, which the two companies expect will happen at the end of calendar year 2024 or the beginning of 2025, Cisco and its partners will find themselves addressing the same kinds of customers, the partner said.
“Those lines will really be blurred,” the partner said.
Irvine, Calif.-based solution provider Trace3, which partners with both Cisco and HPE, is less concerned which vendor “wins” out over the other in the market and is more interested in the innovation that can emerge as a result of a large-scale acquisition, said Steve Wylie, senior vice president and general manager, East Majors, for Trace3.
“From my perspective, I’m focused on my clients and what my clients need first, not as much on: ‘Here’s the OEM that we’re going to represent,’” he said. “From a customer perspective, ideally, [acquisitions like this] only add value for a customer because you’re bringing together networking talent. The pace of innovation is accelerated. The winners are the clients, and the winners are able to solve for problems that clients have, which is what we are all here to do.”
Competition, Wylie said, is great for innovation.
“All boats rise with the tide,” he said. “To the extent that Juniper coming together with HPE brings a more competitive platform, Cisco is going to compete with that too. The winner of this is innovation in the networking space.”