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Hewlett Packard Enterprise acquires Juniper Networks for $14 billion to propel networking business

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HPE Juniper networks acquisition

In a strategic move to propel its networking business growth, Hewlett Packard Enterprise Co. (HPE) has officially announced the acquisition of Juniper Networks Inc. The all-cash deal, valued at approximately $14 billion or $40 per share, is set to double HPE’s networking business and establish a new industry leader with a robust portfolio, providing customers and partners a compelling choice for driving business value.

The merger of HPE and Juniper’s portfolios will significantly enhance HPE’s edge-to-cloud strategy, empowering the company to lead in an AI-native environment built on a foundational cloud-native architecture. This collaboration aims to offer customers of all sizes a secure and comprehensive networking portfolio, addressing the evolving and increasingly complex connectivity needs of businesses. Leveraging industry-leading AI, the merged entity is poised to enhance user and operator experiences, benefiting high-performance networks and cloud data centers.

Juniper’s suite of cloud-delivered networking solutions, software, and services, including Mist AI and the Cloud platform, will complement HPE’s Aruba Networking and purpose-designed AI interconnect fabric. This amalgamation will create a premier industry player capable of accelerating innovation and delivering modernized networking optimized for hybrid cloud and AI.

Upon the completion of the transaction, Juniper CEO Rami Rahim will lead the combined HPE networking business, reporting directly to HPE President and CEO Antonio Neri.

In a press release, Steven Schuchart, Principal Analyst, Enterprise Technology and Services at GlobalData, said, “The combination of HPE and Juniper will create a compelling end-to-end offer comprising server, storage, cloud, networking and high-performance computing all in the context of Juniper’s advanced AI.”

“Customers are looking for security and operational efficiency, in that order. Juniper brings more security to HPE, and AI-driven automation using its Mist AI. The combined companies will be of a size and capability to challenge Cisco and Huawei internationally.” 

Emir Halilovic, Research Director, Telecom Technology & Software at GlobalData, commented, “The proposed acquisition will significantly boost HPE’s presence in the telecom network equipment provider ecosystem. On the other hand, it completes a successful transformation of Juniper into technology provider to cloud service providers, telcos, and enterprises – with telco likely playing a secondary role for HPE networking business going forward.”

Schuchart concluded by saying, “The addition of Juniper makes HPE a stronger competitor for enterprise and telco customers alike and both companies have similar engineer-driven cultures.”

The acquisition will bring significant financial benefits to HPE

The acquisition is expected to yield compelling pro forma financial outcomes, with immediate and long-term top- and bottom-line growth opportunities. The combined company will position HPE for sustained growth, providing greater investment capacity in high-growth areas. The new networking segment is projected to contribute over 56% of HPE’s total operating income, increasing from approximately 18% in fiscal year 2023 to approximately 31%.

The merger brings complementary capabilities to deliver next-generation AI-native networking, enabling new digital experiences through secure, intelligent connectivity. Networking will become the core business and architecture foundation for HPE’s Hybrid Cloud and AI solutions delivered through the HPE GreenLake hybrid cloud platform.

The strategic move accelerates HPE’s evolution and expands its total addressable market, creating opportunities to offer comprehensive solutions to Juniper’s customer base, including enterprise customers, communication service providers, and tier-one cloud customers.

Juniper to revolutionize its AI-native networking

The HPE acquisition of Juniper Networks is poised to transform Juniper’s offerings in AI-native networking, offering end-to-end solutions and enhancing the overall customer experience. This collaboration enables Juniper to provide secure and comprehensive connectivity, including WLAN, Wired, SD-WAN, and cloud-delivered security.

The integration with HPE strengthens Juniper’s position in network-as-a-service (NaaS) and AI Data Center solutions, making it a pioneer in developing comprehensive solutions for AI data centers. The impact extends to its Wide Area Networking portfolio, allowing Juniper to efficiently deploy automated networks across various domains and expand its presence with valued customers.

Market response

Following the announcement, shares of Juniper Networks surged in NYSE, marking its strongest day in decades. The stock rose more than 20%, positioning Juniper as the best performer in the S&P 500. Conversely, HPE’s shares experienced a temporary decline, sliding nearly 8%.

Strategic collaboration with NVIDIA

In November 2023, Hewlett Packard Enterprise announced an extended strategic partnership with NVIDIA, aiming to develop an enterprise computing solution for generative AI (GenAI). This collaboration involves the creation of a co-engineered, pre-configured AI tuning and inferencing solution by HPE and NVIDIA. This innovative solution allows enterprises of all sizes to efficiently customize foundation models using private data and seamlessly deploy production applications from edge to cloud.

HPE’s strategic acquisition of Juniper Networks and collaboration with NVIDIA underscore its commitment to fortifying its AI business. These ventures position HPE to offer comprehensive networking solutions and cutting-edge AI infrastructure, empowering enterprises with seamless customization and deployment capabilities, thereby driving innovation in the AI landscape.

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