
In a development that’s likely to dramatically reshape the AI networking sector, Hewlett Packard Enterprise has closed its $14 billion acquisition of Juniper Networks. HPE, having settled the U.S. Department of Justice antitrust lawsuit contesting the purchase, has now cleared the regulatory review needed to finalize the merger of these two enterprise IT leaders.
Closing its purchase of Juniper—a leader in AI networking—makes HPE a powerhouse in cloud native AI networking, a sector forecast to see robust revenue gains as companies invest heavily on cloud and network-intensive AI workloads. HPE now offers a sprawling toolset that includes hybrid and multi-cloud, edge computing, and security, with a particularly deep strength in the global $70 billion networking sector. The AI networking sector alone generates $11 billion revenues annually.
As the DOJ noted in its antitrust lawsuit contesting the merger, HPE’s acquisition of Juniper combines the second and third largest enterprise wireless networking providers in the U.S., behind only Cisco. Now the combination of Juniper’s industry-leading Mist AIOps solution with HPE’s Aruba networking gives HPE a highly competitive solution in predictive network automation, a key technology in managing data-intensive AI workloads. Arguably, this provides HPE with an edge over Cisco, the reigning giant in enterprise networking.
Given that the government sought to maintain market competition in the wake of this mega-merger, the concessions demanded by the DOJ to settle the lawsuit don’t appear to significantly impact HPE’s opportunity to dominate the network sector. The settlement required just two concessions.
First, HPE agreed to divest its Aruba Instant On wireless business, a networking solution geared for the SMB sector. At a press conference to announce the deal’s closure, HPE CEO Antonio Neri addressed the impact of divesting Aruba On for HPE. “It’s a very new business,” he said, noting that it’s completely separate from the rest of the traditional HPE Aruba platform. “It’s a very small business for us.”
For the second concession, more significant, HPE must auction licenses to the source code for Juniper’s AIOps for Mist, a next-gen platform that uses AI and ML to automate and streamline operations across networking and security domains.
In a major win for HPE, the company will retain ownership of the original code, though auction winners are free to develop and enhance the code as needed for their product offerings. (The settlement says HPE must facilitate the shift of Juniper engineers who know the code to a new employer.)
At the press conference, HPE’s Neri maintained that this licensure doesn’t affect HPE’s ability to compete, “not at all,” he said. “We have agreed to offer, through an auction, a specific aspect of the Juniper Mist, which is just the AI operations part—not the entire Juniper Mist code,” he said, explaining that the full code base has many features built over several years.
Also speaking at the press conference was former Juniper CEO Rami Rahim, now President and GM of HPE’s networking division. “This is Day One,” Rahim said. “My objective here, as the leader of this combined networking business, is to build the best networking business, really, on the planet.”
Furthermore, “I’m rolling up my sleeves, and starting on a customer and market-focused thoughtful integration strategy,” he said. Guiding this strategy is a “true North, around secure, AI native, and cloud native networking.”