Official: Hewlett Packard Enterprise wants to swallow Juniper Networks in $14B deal
- Reference: 1704845610
- News link: https://www.theregister.co.uk/2024/01/10/hewlett_packard_enterprise_snaps_up/
- Source link:
This comes after [1]rumors of a takeover began to swirl earlier this week. Prior to the whispering, Juniper was cruising along at about $30 a share. That shot up to about $36 apiece Monday as gossip spread.
HPE expects the acquisition to effectively double the size of its networking business. When complete, the HPE's networking segment is expected to contribute to more than half of the US IT giant's annual operating income. If it all goes ahead, this would also be the largest merger in Hewlett Packard history since the 2011-era [2]Autonomy fiasco , back when HPE and HP Inc were one HP.
[3]
As our friends at The Next Platform [4]highlighted in its analysis of the impending takeover this week, HPE is no stranger to networking, having developed and built its own ASICs and equipment. Over the years the tech titan has also picked up several networking vendors to expand its portfolio. In 2015, the biz [5]dropped $3 billion on Aruba networks, and in 2009 it blew $2.7 billion on switch maker 3Com.
[6]
[7]
A major emphasis of the Juniper acquisition appears to center around the opportunity to capitalize on the growing market for AI products.
"This transaction will strengthen HPE's position at the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further innovation for customers as we help bridge the AI-native and cloud-native worlds, while also generating significant value for shareholders," HPE CEO Antonio Neri said in statement this evening that hit all of the requisite buzzwords.
[8]
Juniper, for its part, presents several opportunities, not the least of which is the company's Mist wireless LAN and switching product that's packed with machine-learning things like chatbots and AIOps features to allegedly help techies proactively identify and remediate network anomalies.
[9]Wireless priesthood begins blessing Wi-Fi 7 hardware
[10]2024 sure looks like an exciting year for datacenter silicon
[11]Cisco's cloud network push will tie licensing change to generational product refreshes
[12]Nvidia revenue explodes, led by datacenter products and … InfiniBand?
While it's true Juniper will dramatically expand HPE's network portfolio, there's also a considerable amount of overlap with existing product divisions to deal with. One of the more notable being that both Aruba and Mist compete in the same market against the likes of Cisco Meraki and Extreme.
Whether this market consolidation will attract the ire of monopoly regulators remains to be seen – they have been standing up to Big Tech a little more lately – and it's hard not to see this being disruptive for existing Juniper and Aruba customers while they sort out consolidation plans.
Should the merger move forward unchallenged, we can also expect to see a shakeup of HPE's leadership with Juniper CEO Rami Rahim taking over combined company's networking business and reporting directly to Neri.
HPE will discuss the implications of the deal in greater detail during an investor call at 0830 US Eastern time Wednesday. ®
Get our [13]Tech Resources
[1] https://www.theregister.com/2024/01/09/hpe_reportedly_to_pay_13/
[2] https://www.theregister.com/2012/11/20/hp_alleges_autonomy_fraud/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZZ4kd3@9QQDde10zCjx4wgAAAFY&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.nextplatform.com/2024/01/09/why-would-hpe-buy-juniper-networks/
[5] https://www.theregister.com/2015/03/02/hp_acquires_aruba_networks_for_3bn/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZZ4kd3@9QQDde10zCjx4wgAAAFY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZZ4kd3@9QQDde10zCjx4wgAAAFY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZZ4kd3@9QQDde10zCjx4wgAAAFY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2024/01/09/wifi_7_alliance/
[10] https://www.theregister.com/2024/01/02/2024_dc_chip_preview/
[11] https://www.theregister.com/2023/12/08/cisco_networking_cloud_licensing/
[12] https://www.theregister.com/2023/11/22/nvidia_q3_2023/
[13] https://whitepapers.theregister.com/
Re: does juniper do much in the "AI" space?
> Looking at Juniper's stock price since the dot com era, I was quite surprised how little it has appeared to move in the past 20 years.
Some very few companies are happy having stable, small amounts of growth and profit with a steady return for shareholders that is sustainable for years and decades without trying to make every quarter record-breaking, and get themselves in the news regardless of whether it's for good or bad reasons, while risking sudden plummets that could make the company at risk of falling apart and being bought out for cheap.
I don't even understand how "AI" can have anything to do with getting packets from point A to point B. It's just algorithms, all it's doing is looking at the traffic to determine if there might be better routes or where there is a problem. It's nothing special. It's not anything new. It's just sticking the latest marketing words on stuff that's been in use for years, like Cloud.
Makes sense
I mean... how are you going to have the next round of massive layoffs if you don't find some way to increase the ranks? Otherwise, you'd eventually have a case where the CEO would have to lay him/herself off and be responsible for turning off the lights on their way out.
Commiserations to all Juniper staff.
expand our total addressable market = reduce the amount of competition
does juniper do much in the "AI" space?
I have been watching the networking space off and on since about 2003. Juniper tried to buy Extreme way back around that time before deciding to go it alone and make their own switches. I remember their first 10G 1U switch, didn't even run their software they OEM'd some 3rd party platform and put their name on it. They came out with their own stuff of course eventually.
As time went on it seemed they struggled to gain much share outside of their service provider space(basically they were mostly selling to people already buying their routers). Haven't noticed much has changed in that regard, so seems strange to me that HPE would place this kind of a bet with "AI" as a justification. Maybe it's just due to the hype surrounding it, makes it more likely their shareholders approve of the purchase or something.
Juniper certainly has a lot of solid tech though the complexity of their JunOS is pretty crazy to me(same goes for Cisco). I'm sure it makes sense for several use cases though.
As someone who does networking as only a minor part of my role(though through every company I have worked for in the last 20 years my networking expertise was above most everyone else's in the org), Extreme's simplicity and functionality beat everything else on the market(been using them since 1999). Hell I still use network designs I first started with in 2004 because they work so well(such designs wouldn't apply to "AI" workloads but I don't have any of those). Not that Extreme has ever really taken off in the market either, I remember a Foundry Networks rep back in 2004 trying to convince me Extreme was going out of business in the next couple of years.. ironic that it was Extreme who acquired several of the Brocade(Foundry) network assets over a decade later.
HPE seems to have so many different switching platforms under their roof, hopefully they can consolidate the user interfaces at least(pretty radical differences between some of them anyway).
Certainly seems to me if AI networking was a super important thing to HPE they could do a much better job sourcing the same merchant silicon ASICs and making their own high end stuff for a fraction of the money. They obviously have the server/storage(and even networking, Aruba switching is super popular among network engineers(I have never personally tried it)), market penetration already.
Curious for anyone who knows - does HPE have (m)any supercomputers (Cray, etc?) out there running on Juniper network gear? I assume a lot of it is infiniband or something. Curious because I'd expect similar networking requirements for AI.
Looking at Juniper's stock price since the dot com era, I was quite surprised how little it has appeared to move in the past 20 years.