The HPE-Juniper Networks U.S. DOJ Settlement: Five Things You Need To Know

The U.S. Department of Justice has agreed to settle the lawsuit challenging Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks, setting the stage for an epic AI networking battle with market leader Cisco. Here’s a look at the settlement and what it means for partners.

The U.S. Department of Justice’s decision to drop the lawsuit challenging Hewlett Packard Enterprise’s $14 billion of acquisition of Juniper Networks provides the AI and data center networking muscle to go head to head against Cisco in a heated battle for AI network supremacy, partners told CRN.

“This is a huge victory for HPE, its partners and customers,” said Bob Panos, president of American Digital, Schaumburg, Ill., which was just named HPE North America Solution Provider of the Year at HPE Discover. “This means the market finally has a viable competitor to Cisco. HPE now has a full portfolio from the branch to the campus to the data center to challenge Cisco. This is a huge win for [HPE President and CEO] Antonio [Neri] and the HPE team.”

Cisco, for its part, responded with this statement to CRN: “Cisco powers the networks of over 95 percent of Fortune 500 companies and serves every major industry. As the only company offering a complete, fully integrated networking and security offering, no one is better positioned to drive enterprise infrastructure in the AI era than Cisco. At Cisco Live, we unveiled innovations to accelerate AI adoption and transform IT with next-generation networks, security, observability and collaboration. By solving challenges across domains and driving architectural shifts with trust at our core, Cisco is leveraging its market leadership across industries to help organizations stay ahead and navigate the future of technology.”

The DOJ settlement, which was filed on June 27 in the U.S. District Court for the Northern District of California, requires the combined HPE-Juniper to license the source code for Juniper’s Mist AI software used in Juniper’s WLAN products to two winning bidders and to divest HPE’s Instant On wireless networking business.

Even though it is required to license Mist AIOps, HPE said it is retaining full ownership of the software and will continue to innovate on it.

HPE partners said they see the concessions as minor given the robust edge-to-cloud portfolio a combined HPE-Juniper will now have to compete against Cisco.

“I’m so happy this has been settled,” said Panos. “This is a going to be very good for customers. This acquisition from the beginning was always about being able to provide customers with a full AI networking solution from the edge to the data center to the cloud. This fills all the gaps. It means customers can now get a full one- stop-shop solution from HPE and American Digital. They don’t have to look to any other vendor for their IT needs.”

Panos said the settlement is a “huge opportunity” for American Digital to grow its business in the data center market, providing customers with a complete edge-to-cloud AI networking solution. “This supercharges our networking business,” he said. “This is going to allow us to continue our double-digit HPE sales growth.”

C.R. Howdyshell, CEO of Independence, Ohio-based Advizex, No. 129 on the CRN 2025 Solution Provider 500, a Fulcrum IT Partners company, said the settlement is “game-changer” for HPE and its partners.

“This is an incredible opportunity for HPE versus Cisco,” he said. “It gives customers a choice. It gives HPE a competitive advantage in the networking space to go get market share versus Cisco. It means more revenue and more opportunity for the channel and companies like Advizex that are committed to the networking market.”

Patrick Shelley, CTO at PKA Technologies, a Montvale, N.J., solution provider, called the settlement a “huge victory” for HPE.

“This is great news,” he said. “It feels so good. The concessions from HPE to get this deal approved are minor. This is a big win for HPE, partners and customers. In my opinion, this instantly puts HPE-Juniper in a leadership position against Cisco. Aruba and Mist AI together are an unbeatable combination.”

Here's a look at the terms of the DOJ’s settlement greenlighting HPE’s $14 billion acquisition of Juniper Networks.

HPE-Juniper: A New AI Networking Superpower

The settlement, which still must be approved by the U.S. District Court for the Northern District Court of California, creates a $35 billion networking superpower with a robust portfolio of AI networking software from the branch to the campus to the data center.

The deal combines HPE’s Aruba branch and campus AI networking strength with Juniper’s Mist AIOps software and data center networking portfolio.

The combination effectively doubles the size of the HPE networking business to $11 billion, with more than 50 percent of the company’s profits coming from the networking business.

“For the first time, customers will now have a modern network architecture alternative that can best support the demands of AI workloads,” said Neri in a prepared statement after the DOJ settlement. “The combination of HPE Aruba Networking and Juniper Networks will provide customers with a comprehensive portfolio of secure, AI-native networking solutions and accelerate HPE’s ability to grow in the AI data center, service provider and cloud segments.”

When the deal was first announced 17 months ago, Neri told HPE employees that the acquisition opens the door for the company to play a bigger role in the networking market that has “been dominated for too long by incumbent players that are comfortable with the status quo.”

In fact, Neri said, the “transformative deal” effectively creates a “new HPE” with secure networking as its new core business to accelerate “AI-driven and hybrid cloud strategies.”

At the time, Neri wrote: “Our acquisition of Juniper puts one powerhouse networking player together with another, creating an industry leader that will catalyze innovation across the entire networking stack.”

HPE Must License Juniper Mist AIOps Source Code

The landmark settlement with the DOJ requires HPE to abide by a lengthy list of requirements around the licensing of Juniper’s AIOps for Mist, including granting the U.S. government final approval for up to two winning bidders for the license, and the transfer of 55 Juniper employees to one of those entities.

Even though it is required to license Mist AIOps, HPE said it is retaining full ownership of the software and will continue to innovate on it.

Starting from the close of the Juniper sale, HPE has 180 days to auction AIOps for Mist source code, but only to a bidder that is “acceptable to the United States, in its sole discretion.”

While the winning bidder is not allowed to use the Mist trademark, HPE is ordered to create a commercial framework that will allow it to do business with the winning bidder and “provide transition services” that includes “any knowledge transfer assistance, software updates, engineering support for ordinary course maintenance, and bug fixes as it relates to AIOps for Mist source code,” according to the judgement.

In addition, HPE must “facilitate” the transfer of up to 30 Juniper engineers familiar with the Mist AIOps source code and another 25 employees who are familiar with selling Mist AIOps.

According to the judgement, this means providing financial incentive to encourage the employees to leave Juniper to work at whoever wins the auction. The winning bidder is not allowed to solicit additional Juniper engineers or sellers beyond a set of agreed-upon employees.

HPE is also required to give the winning bidder contact information and introductions to Juniper’s original design manufacture for WLAN hardware, as well as Juniper’s distributors for WLAN in the U.S., and channel partners that work with Juniper to sell WLAN in the U.S.

If multiple winners emerge from the auctions, each one will be able to use AIOps for Mist source code for its networking products and they will have the right to develop and innovate the code to create derivatives, according to the judgement.

In addition, the winning bidders can give the right to use the source code to “end users, intermediaries and service providers” in connection with the sale of its networking products.

The HPE license to the up to two winning bidders is far-reaching and includes the right for the winning bidders to utilize the AIOps for Mist source code for their own networking products with the “right to further develop and innovate the AIOps for Mist source code.”

HPE is also required to “patent cross licenses” to the winning bidders.

HPE Must Sell Its HPE Aruba Instant On Product

As part of the settlement with the DOJ, HPE has agreed to sell HPE Aruba’s Instant On business wireless networking product, designed as an easy-to-use wireless offering for small businesses.

The product, which was launched six years ago, includes indoor and outdoor access points that provide a secure, high-speed wireless connection with simplified setup and management for up to 25 access points, or 100 employees or fewer.

In May, HPE added to the Instant On business with the Networking Instant On Secure Gateway, designed to safeguard small-business networks against cyberthreats.

Under the settlement agreement with the DOJ, HPE must sell off the Instant On business, including all “hardware inventory, and other tangible property; all contracts, contractual rights, and all other agreements, commitments, and purchase orders; all licenses, permits, certifications, approvals, consents, registrations, waivers, and authorizations.”

The divestiture also includes R&D employees tied to the Instant On business and a license to the version of HPE’s AOS 8 software used with Instant On.

In addition, the Instant On divestiture includes “intellectual property owned, licensed, or sublicensed (and, for shared intellectual property, a perpetual license), including the Instant On trademark.”

HPE is required to complete the divestiture to a buyer that must be “acceptable” to the U.S. government within 180 days after the filing of the June 27 proposed judgement.

HPE-Juniper Must Comply With Antitrust Procedures: Requirements Before Completing The Acquisition

Before HPE and Juniper Networks can move forward with the blockbuster deal, the two companies must meet the Antitrust Procedures and Penalties Act (APPA) requirements as outlined in the proposed settlement.

The APPA requirements—which are designed to ensure public input and transparency—provide a period of at least 60 days before the effective date of the proposed final judgement for written comments from the public.

“Any person who wishes to comment should do so within sixty days of the date of publication of this Competitive Impact Statement in the Federal Register, or the last date of publication in a newspaper of the summary of this Competitive Impact Statement, whichever is later,” reads the court filing. “All comments received during this period will be considered by the United States Department of Justice, which remains free to withdraw its consent to the proposed Final Judgment at any time prior to the Court’s entry of judgment.”

Once HPE and Juniper comply with the APPA requirements, the final order can be approved by the court.

After Final Court Approval, The ‘Integration’ Process Begins

HPE and Juniper will undergo an extensive integration process after receiving final court approval, including moving forward with a commitment to achieve at least $450 million in annual gross savings within three years after the acquisition is finalized.

HPE Worldwide Channel and Partner Ecosystem leader Simon Ewington has already said HPE intends to integrate the Juniper Networks channel program into the new unified Partner Ready Vantage.

At the time the deal was announced, HPE said HPE Vice President and COO John Schultz would serve as chief integration officer, overseeing the integration of the two companies.

Furthermore, HPE said at that time that Juniper CEO Rami Rahim would lead the combined networking business, reporting to Neri.

In addition, HPE had said current HPE Executive Vice President and General Manager of Aruba Phil Mottram would “continue to play an integral leadership role once the two organizations are combined.”

Last November, Rahim said the heart of the acquisition involves “transforming what networks can do for all those that use them, from delivering better experiences with traditional applications to meeting the growing demands of AI workloads.”

Rahim said Juniper has been building AI networks for the last decade with its Mist AI product, resulting in network automation that was heretofore simply not possible. “We’re using Mist AI to predict issues before they even happen,” he said. “We are reducing Opex by up to 85 percent in some instances and cutting network downtime significantly.”

As a combined company, HPE and Juniper will have “more customers, more networks, and more devices deployed around the planet,” said Rahim. “So that means our leading AIOps capabilities are only going to become smarter and even more effective, basically ensuring the best end-to-end experiences for our customers and of course amazing experiences for those operators that are running the networks today.”