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    HomeAutomation/AIHPE to acquire Juniper Networks for $14bn in cash

    HPE to acquire Juniper Networks for $14bn in cash

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    Says their complementary portfolios will “enhances secure, unified, cloud and AI-native networking to drive innovation from edge to cloud to exascale”

    Hewlett Packard Enterprises (HPE) and Juniper Networks announced they have entered a definitive agreement for HPE will acquire Juniper in deal worth $14 billion. 

    The rationale is that their combined portfolio will create “higher-growth solutions and [strengthen] its high-margin networking business, accelerating HPE’s sustainable profitable growth strategy”.

    Given HP’s somewhat unhappy history of mega acquisitions (Autonomy anyone?), does the rationale stand up? Shareholders are not convinced, HPE’s share price fell almost 9% at the news.

    Here’s the corporate narrative: HPE was split off from HP’s PC and printers business in 2015. largely to concentrate on hardware and software solutions for data centres. Its ambitions lie in AI, cloud and networking.

    Moving into AI cloud

    One strategic plank is to embed AI is into its products and solutions, then regarding cloud, last June HPE announced its entry into the AI cloud market. It introduced HPE GreenLake to develop large language models (LLMs). The models are for “any enterprise to privately tune and deploy large-scale AI through an on-demand, multi-tenant supercomputing cloud service.”

    HPE said this was the first in “a series of industry and domain-specific AI applications with future support planned for climate modeling, healthcare and life sciences, financial services, manufacturing, and transportation”. It made a raft of further announcements at its HPE Discover Barcelona 2023 towards the end of last year, including a collaboration with NVIDIA to deliver “an enterprise-class, full-stack GenAI solution”.

    Antonio Neri, president and CEO, at HPE, said about the announcements at the event, “Through HPE’s AI-native and hybrid cloud solutions, organizations will be able to fully capitalize on the insights from their data to revolutionize product innovation, customer engagement, and overall realize the full power of GenAI to transform their businesses and industries.” HPE also raised its dividends for fiscal year 2024.

    Moving AI into enterprise

    Meanwhile, Juniper Networks kick started its AI quest by acquiring Mist Systems four years ago. Its focus has largely been AI-enabled network automation and has made big inroads into the enterprise market of late, outstripping its telco and data centre business.

    So the alignment seems reasonable, although of course the execution of M&A after the ink is dried is what makes or breaks them. News of the proposed acquisition, which will of course be subject to all the usual approvals, sent HPE’s share price down.

    Once the transaction is completed, Juniper’s CEO Rami Rahim will lead the combined HPE networking business, reporting to Neri who said of the deal, “HPE’s acquisition of Juniper 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.”

    Going native

    For his part, Rami said, “Our multi-year focus on innovative, secure AI-native solutions has driven Juniper Networks’ outstanding performance. We have successfully delivered exceptional user experiences and simplified operations, and by joining HPE, I believe we can accelerate the next phase of our journey.

    “In addition, this combination maximizes value for our shareholders through a meaningful all-cash premium. We look forward to working with the talented HPE team to drive innovation for enterprise, service provider and cloud customers across all domains, including campus, branch, data center and the wide area network.”