Hewlett Packard Enterprise (HPE) has entered into a definitive agreement to acquire Juniper Networks for USD 40 per share, totaling an equity value of about USD 14 Billion. This strategic move is aimed to enhance HPE’s portfolio by focusing on higher-growth solutions and reinforcing their high-margin networking business. HPE expects to double their networking business, positioning the combined entity as a leader in networking solutions. With the growing demand for secure, unified technology driven by AI and hybrid cloud trends, HPE aims to offer comprehensive, disruptive solutions that connect, protect, and analyse data from edge to cloud.
This would also be the organisation’s largest deal since becoming an independent company in 2015. The acquisition is expected to be completed by late 2024 or early 2025.
Ecosystm analysts Darian Bird and Richard Wilkins provide their insights on the HPE acquisition and its implications for the tech market.
Converging Networking and Security
One of the big drawcards for HPE is Juniper’s Mist AI. The networking vendors have been racing to catch up – both in capabilities and in marketing. The acquisition though will give HPE a leadership position in network visibility and manageability. With GreenLake and soon Mist AI, HPE will have a solid AIOps story across the entire infrastructure.
HPE has been working steadily towards becoming a player in the converged networking-security space. They integrated Silver Peak well to make a name for themselves in SD-WAN and last year acquiring Axis Security gave them the Zero Trust Network Access (ZTNA), Secure Web Gateway (SWG), and Cloud Access Security Broker (CASB) modules in the Secure Service Edge (SSE) stack. Bringing all of this to the market with Juniper’s networking prowess positions HPE as a formidable player, especially as the Secure Access Service Edge (SASE) market gains momentum.
As the market shifts towards converged SASE, there will only be more interest in the SD-WAN and SSE vendors. In just over one year, Cato Networks and Netskope have raised funds, Check Point acquired Perimeter 81, and Versa Networks has made noises about an IPO. The networking and security players are all figuring out how they can deliver a single-vendor SASE.
Although HPE’s strategic initiatives signal a robust market position, potential challenges arise from the overlap between Aruba and Juniper. However, the distinct focus on the edge and data center, respectively, may help alleviate these concerns. The acquisition also marks HPE’s foray into the telecom space, leveraging its earlier acquisition of Athonet and establishing a significant presence among service providers. This expansion enhances HPE’s overall market influence, posing a challenge to the long-standing dominance of Cisco.
The strategic acquisition of Juniper Networks by HPE can make a transformative leap in AIOps and Software-Defined Networking (SDN). There is a potential for this to establish a new benchmark in IT management.
AI in IT Operations Transformation
The integration of Mist’s AI-driven wireless solutions and HPE’s SDN is a paradigm shift in IT operations management and will help organisations transition from a reactive to a predictive and proactive model. Mist’s predictive analytics, coupled with HPE’s SDN capabilities, empower networks to dynamically adjust to user demands and environmental changes, ensuring optimal performance and user experience. Marvis, Mist’s Virtual Network Assistant (VNA), adds conversational troubleshooting capabilities, enhancing HPE’s network solutions. The integration envisions an IT ecosystem where Juniper’s AI augments HPE’s InfoSight, providing deeper insights into network behaviour, preemptive security measures, and more autonomous IT operations.
Transforming Cloud and Edge Computing
The incorporation of Juniper’s AI into HPE’s cloud and edge computing solutions promises a significant improvement in data processing and management. AI-driven load balancing and resource allocation mechanisms will significantly enhance multi-cloud environment efficiency, ensuring robust and seamless cloud services, particularly vital in IoT applications where real-time data processing is critical. This integration not only optimises cloud operations but also has the potential to align with HPE’s commitment to sustainability, showcasing how AI advancements can contribute to energy conservation.
In summary, HPE’s acquisition of Juniper Networks, and specifically the integration of the Mist AI platform, is a pivotal step towards an AI-driven, efficient, and predictive IT infrastructure. This can redefine the standards in AIOps and SDN, creating a future where IT systems are not only reactive but also intuitively adaptive to the evolving demands of the digital landscape.
Last week, HPE announced that they will acquire Silver Peak – the wide area networks (WAN) specialist, including WAN optimisation and Software-Defined (SD-WAN) – in a deal worth USD 925 million. The move is in line with HPE’s Intelligent Edge strategy and their intention to provide a comprehensive edge-to-cloud networking solution.
HPE Building Intelligent Edge Capabilities
In 2018, HPE announced their intention to invest USD 4 billion over the next 4 years, to build an Intelligent Edge offering. This acquisition will give them the ability to combine the Aruba Edge Services platform with Silver Peak’s SD-WAN platform, to provide next-generation networking solutions.
In 2015, HPE acquired Aruba for USD 3 billion to strengthen capabilities on integrated and secure wireless technology and to support the access to cloud application, at a faster speed. Bringing together the innovation and technology capabilities of both units will accelerate HPE’s edge-to-cloud strategy to enhance distributed cloud models for application and data services for users.
Ecosystm Principal Advisor, Ashok Kumar says, “HPE leaped into the wireless local area networks (WLAN) space with the acquisition of a major enterprise Wi-Fi network vendor Aruba Networks, five years ago. With the acquisition of SD-WAN vendor Silver Peak last week, HPE extends enterprises’ reach with its Intelligent Edge portfolio. The synergy of Aruba and Silver Peak provides a fuller enterprise networking portfolio of solutions for HPE.”
The acquisition has been announced as markets are gearing towards recovery and organisations are opting for a more distributed working environments with remote employees. Kumar says, “The convergence area of networking and security at the enterprise edge is a high growth area that has accelerated due to the COVID-19 pandemic to address the remote worker’s needs.”
The current situation, compounded by the 5G rollouts in several global markets, is also forcing telecom operators to transform their business models. Telecom providers will now have to increasingly target B2B opportunities. Last month also saw HPE announce their Edge Orchestrator, a SaaS offering bringing lower latency, optimised bandwidth and improved security and privacy for telecom providers and their own enterprise customers to take advantage of 5G. Aruba Networks also rolled out a cloud native platform, Aruba ESP that has AIOps, Zero Trust network security and a unified infrastructure for data centres capabilities, to support remote operations.
“HPE’s success in this area will be dependent upon the tight integration of the two product line portfolios, and the channels of distribution, to effectively address the needs of enterprises at the edge with smarter solutions,” says Kumar.
The Growing Importance of SD-WAN
In the report, The Top 5 Telecommunications & Mobility Trends for 2020, Ecosystm had noted the growing significance of SD-WAN for enterprises, as they undertake Digital Transformation (DX) journeys and require more responsive and self-sustaining networks. The entire network infrastructure will have to be software-centric allowing for agility, scalability, and normalising costs with business growth. This has proved to be especially true in the wake of the current crisis.
“The network is a foundation on which a significant amount of Digital Transformation (DX) becomes possible, so as companies move through their DX journeys, often changing course, the network will need to adapt with them. AI, virtualisation and SD-WAN will bring increasing levels of flexibility as they lessen the need for specialised hardware, centralise control, and speed up configuration changes.
The availability of high-bandwidth, low latency networks coupled with SD-WAN will allow enterprises to shift away from thinking of their network as a physical space and start seeing it as a set of capabilities, taking work beyond a physical address. Equipment will be increasingly centralised in data centres (possibly on the Edge) to provide the ability to truly work anywhere.”
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