Hewlett Packard Enterprise (HPE) has entered a deal to buy AI-driven firm Juniper Networks in an all-cash transaction for $40.00 per share, representing an equity value of approximately $14 billion.
The US-based enterprise tech firm, which split off from Hewlett Packard’s (HP) computer unit in in 2015, makes hardware and software for high performance networks and cloud data centres.
According to HPE the deal with Juniper — which is expected to close at the end of the year following due diligence and regulatory approval — is a move that will cater for the latest AI-driven and hybrid cloud systems, which demand secure and speedy communications within and between servers.
In a statement HPE said that the acquisition is expected to double its networking business and will “supercharge” its edge-to-cloud strategy.
Juniper, founded as a rival to Cisco in 1996, provides a suite of cloud-delivered networking solutions, software, and services such as Mist AI, which uses data analytics and machine learning to address network problems and improve the customer experience.
Juniper has also started to integrating gen AI tools into its control systems, including ChatGPT.
HPE said that the combined company, with HP’s own “Intelligent Edge” enterprise network Aruba and AI interconnect fabric offerings, would meet customer demand for AI- and hybrid-cloud driven networking.
Upon completion of the transaction, Juniper CEO Rami Rahim will lead the combined HPE networking business, reporting to HPE president and CEO Antonio Neri.
“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,” said Neri.
“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,” he added.
A deal of this size is as much about revenues, customers and market share as it is technology. During a press briefing held yesterday (10 Jan) HPE’s Neri and Juniper’s Rahim discussed the ability for Juniper to scale and deliver internationally via HPE’s channel.
“My commitment to the channel has always been to bring the best technology and the best people to allow them to be relevant to our customers and this combination is going to make our partners much more relevant because we’re going to make it simpler for them to combine the two portfolios and to meet and exceed customer expectations,” said Neri.
“Juniper will now get access to one of our crown jewels — which is the partner community outside the US — and this will allow us to bring fantastic technology from Juniper to the rest of the world in a way that Juniper couldn’t have done by itself,” he added.
On the reverse side, Neri acknowledged, within the US HPE will now be able to leverage “the massive install base Juniper has to bring the rest of the portfolio”.
One of Juniper’s crown jewels is its operating system Junos OS, trusted by some of the biggest service providers, cloud providers and enterprises to run global, mission-critical networks. “This deal will add more fuel, more of an ability to invest and more of an ability to innovate in Junos as our customer know and love it today,” Rahim assured.
When asked about plans to integrate Juniper’s highly regarded customer service organisation Neri said the approach would be to give customers what they need “at the right time for the right use case”.
He added: “Both services teams have a similar culture. It’s not that different but our goal is to maintain regular service for all our customers, but all take the opportunity to drive more services through that motion.”
Following a year of layoffs (Juniper itself cut over 400 jobs last October) the deal also represents the acceleration of a new round of M&A activity, and comes in the aftermatch of Cisco’s $28bn acquisition of Splunk in September and chipmaker Broadcom’s $69bn acquisition of cloud software company VMware in November.
