HPE’s Potential $13B Acquisition of Juniper Networks Would Set Up High-Stakes Networking Battle With Cisco: Partners
‘This is HPE potentially taking direct aim at Cisco,’ says Advizex CEO C.R. Howdyshell. ‘This deal would give HPE and its partners more firepower to go against Cisco.’
[Editor’s note: HPE announced its deal to buy Juniper Networks after publication of this story.]
A potential Hewlett Packard Enterprise $13 billion acquisition of Juniper Networks sets up a battle for network supremacy in the AI era between HPE Aruba and networking powerhouse Cisco Systems, partners told CRN.
“This is HPE potentially taking direct aim at Cisco,” said C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company and a top HPE and Aruba partner that has invested heavily in networking as a service. “This deal would give HPE and its partners more firepower to go against Cisco.”
One of the biggest potential benefits is access to the robust Juniper Mist AI networking capabilities, said Howdyshell. “If this deal does happen it would open the door for us to combine Juniper Mist AI into our networking-as-a-service portfolio,” he said. “That would enhance everything we are doing around AI and networking as a service with Aruba.”
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The Wall Street Journal Monday reported that HPE is in advanced talks to buy Juniper Networks for its AI-powered networking expertise in a deal that could be valued at about $13 billion.
Both HPE and Cisco would not comment on the report.
Howdyshell said Advizex has co-invested in the HPE Aruba networking-as-a-service model led by Advizex NaaS Practice Architect Jared Baber, a former healthcare security IT executive. “We’ve put together a joint business plan with Aruba to bring networking as a service to our customers,” he said. “If HPE does buy Juniper it is only going to complement our strategy.”
Artificial Intelligence Changing The IT Landscape
A potential HPE-Juniper acquisition is one more example, said Howdyshell, of how AI is transforming every nook and cranny of the IT landscape.
Howdyshell said AI is the most explosive growth opportunity ever for the channel and is sparking acquisitions in every segment of the market.
Fulcrum IT Partners, for its part, is about to close on the acquisition of an AI-based solution provider. “Fulcrum and Advizex are investing heavily in AI,” he said. “AI, in fact, is driving a new era of AI-as-a-service solutions for the channel. Because of the investments that Fulcrum is making, it gives us a better position to take advantage of the AI market opportunities.”
Michael Maher, director of professional services at CPP Associates, Clinton, New Jersey, the 2023 HPE GreenLake partner of the year, said he sees the potential HPE acquisition of Juniper filling a big gap in the HPE Aruba networking portfolio.
“This would fill some gaps in HPE’s networking portfolio, providing an enterprise-grade firewall for the service provider market,” said Maher. “This would give HPE a bigger data center and service provider footprint to go up against Cisco. It positions HPE to take on Cisco directly with a broader networking strategy with security, automation, and AI including real-time risk and threat assessment. “
If the deal does come to fruition, it will significantly expand HPE’s technology and channel footprint, said Maher. “If it does take place, it will be interesting to see how HPE determines what is viable going forward from both a technology and partner program perspective,” he said.
The CEO for an SP500 partner, who did not want to be identified, said he sees the $13 billion price tag as a high premium given the overlapping capabilities between the Juniper Mist AI and Aruba platform. “It’s hard to tell if Juniper has some secret sauce or technology that bolsters their AI approach,” he said. “I don’t see the product alignment that would be worth $13 billion. It seems additive to me.”
HPE Vs. Cisco
A top channel executive familiar with Juniper and HPE said he definitely sees a more formidable battle between HPE and Cisco if the deal actually happens.
“Cisco has always been Juniper’s biggest competitor,” he said. “It’s a very expensive deal given Juniper has $5 billion in sales and a market cap of about $10 billion. The synergies could be tough to achieve given the differences between the Aruba and Juniper product portfolios. I think it would be hard to integrate the technology piece of this.”
The deal would also pose channel integration issues given the differences in the HPE, Aruba and Juniper channel programs, said the executive. “There is a big difference between the Aruba and HPE channel programs and now you are adding in the Juniper channel program as a third program,” he said.
Juniper’s market capitalization was down nine percent in 2023 to $9.4 billion. The drop in market capitalization came with the networking provider announcing last fall that it was laying off 440 employees as part of a $59 million restructuring plan.
Shares of Juniper- which finished fiscal year 2022 with $5.3 billion in annual sales, were trading up $6.38 or 21 percent to $36.60 on Tuesday on reports of the potential deal, sending the company’s market capitalization soaring from $9.64 billion to $11.68 billion.
Shares of HPE, which finished fiscal year 2022 with $28.5 billion in sales, were down $1.28 or seven percent on Tuesday, sending the company’s market capitalization down from $23 billion to $21.73 billion.