HPE's has closed the acquisition of Juniper Networks in a move that will double its networking business.
Completing the deal took more than 18 months.
The company announced plans to buy Juniper in January 2024 for $14 billion, received shareholder approval in April the same year and then ran into regulators and a new administration in the US.
Last month, HPE said it settled with the US Department of Justice and agreed to divest its Instant One campus and branch networking business and provide limited access to Juniper's Mist AIOps technology.
HPE, which just held its Discover annual conference, is looking to use Juniper to offer a complete AI stack and improve its margins. Juniper delivered first quarter net income $64 million on revenue of $1.28 billion, up 11% from a year ago.
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CEO Antonio Neri said HPE is looking to capitalize on the convergence of AI infrastructure and network and expand its total addressable market. In a blog post, Neri added:
"AI relies on vast, distributed datasets that must be connected securely and sustainably to train or fine-tune foundational or agentic models, and to deploy them for inferencing. That means the network must do more than simply connect users, servers, and storage. It must adapt, scale, and continually become more intelligent."
With the deal closed, now the hard work begins. Here's what HPE said it would do with Juniper in the fold.
- Integrate Juniper networking with HPE's stack across AI infrastructure and hybrid cloud.
- Expand into adjacent markets including data center, firewalls and routers.
- Develop AI-centric integrated systems.
- Offer a complete stack via HPE's global sales teams and channel.
- Grow non-GAAP earnings in the first year after the close with the combined networking business accounting for more than 50% of HPE operating income.
Constellation Research analyst Holger Mueller said:
"A deal that looked like it may not clear regulatory hurdles has made it to the finish line. A compliment for HPE and its leadership tenacity - and a strategic win for HPE as it bolsters its networking business - almost a decade after the Aruba acquisition. Juniper gives HPE key capabilities of software defined networking and even more importantly - sizeable public cloud revenue, which has been an area of growth that has eluded HPE. The deal takes HPE back to the future when it was an HP that offered all most all a CIO needed to buy for an enterprise."
Here’s a look at Juniper’s trended revenue it will bring to HPE.
In its first quarter commentary, Juniper said:
“Product orders remained strong and were better than expected, growing double digits year-over-year for the fourth consecutive quarter. Cloud orders continued to be particularly robust, growing triple digits on a year-over-year basis and double digits sequentially, as these customers invest to enable their AI initiatives. Enterprise orders saw double digit year-over-year growth, with orders for Mist and other products attached to the Mist cloud growing more than 40% year-over-year. Service Provider orders were down on a year-over-year basis.”
