Some news you expect, some not. I’ll be honest — I didn’t expect this and would have bet against the idea if someone had told me yesterday. HPE acquires Juniper Networks.
I had a few days to process it, and during that time, I had an epiphany. Looking back at the beginning of 2023 at the Atmosphere conference in Aruba, it struck me why HPE is making this move, which is a very different approach from Aruba’s past. Aruba’s founders — Keerti Melkote and Pankaj Manglik — and CEO credited for their rise, Dominic Orr, grew the business by challenging the fat point access (AP) approach in the early 2000s with a unique vision for manage a wireless network. Aruba’s (HPE) new executives from Silver Peak, HPE and Axis see acquisitions as way to grow networking business. At first glance, buying Juniper might seem like a bad approach because of the many overlaps (ie, both companies have switching and wireless product lines), but there’s more to it than you might think. Many of Juniper’s products and IP would take a long time to build into HPE organically, and it would be very messy if the company tried to buy different pieces, as Extreme Networks did with Enterasys, Motorola, Aerohive, Avaya and Brocade. HPE needs a big fish if it is going to hit its targets quickly.
Here’s what HPE gets from a Juniper acquisition:
- Artificial Intelligence. Juniper’s AI product, called Marvis (part of its 2019 Mist acquisition), is by far the most advanced AI solution in the networking market. This is not a profound statement. no seller has anything near him. The quick story: Juniper’s acquisition of Mist brought the company a cloud-based Wi-Fi solution with leading AI capability, Marvis. Juniper quickly began integrating its switching and routing portfolio into Marvis. Walmart, Amazon and others have taken note. Fast forward to today: This gives HPE Aruba a two-year lead over its competitors, bringing Juniper into line.
- A serious data center switching solution. HPE has had many starts but has always failed when it comes to data center solutions ranging from 3Com switches to the recent Aruba CX switches. None of them stood up to what Arista, Cisco and Juniper had to offer. Now, Aruba features Juniper’s data center switching line and a powerful operating system, Junos.
- Real cloud-based management and monitoring. I think we can all agree that traditional network vendors don’t excel at creating intuitive modern software. In particular, none of them could create good, simple cloud-based management and monitoring solutions for switches and APs. This is the main reason why Cisco bought Meraki, Juniper bought Mist and Extreme Networks bought Aerohive. For HPE Aruba, moving Central to the cloud didn’t prove easy. Now, HPE Aruba will have Mist.
- Market position of service providers. Aside from Cisco, Juniper is the only enterprise network vendor with a strong presence in the cloud and telecom market. Juniper brings in about $2 billion in annual revenue from the SP market, which is about 40% of the company’s revenue in 2023. HPE is trying to gain a networking foothold in the 5G market so it can bring in more Silver Peak sales, the which also capitalize on the 2023 acquisition of private 5G Athonet.
- A strong safety history. Through this acquisition, HPE aims to further strengthen its growing security portfolio by gaining Juniper’s enterprise firewall and cloud sandbox, along with a capable threat intelligence team. It’s unclear, however, whether Juniper’s “Connected Security” strategy, where switches participate in a security mesh, will find a forever home at a conglomerate like HPE. HPE introduced a similar feature in its CX series, which brings application visibility and policy enforcement to the switch. However, this recent enhancement has attempted to position CX switches as an enterprise firewall alternative, and it may be too early in its release to determine its value.
What does this mean for the competition?
- Arista Networks. While many may see this acquisition as hurting Arista, I actually see it as a win. Arista will be the only company to offer a single network operating system with a clear and concise network focus. Other sellers will spend countless resources trying to clear piles of acquired products. Juniper resellers, who have a strong technical skill set and customer lists, will likely turn to Arista Networks.
- While Cisco lacks AI capabilities, the company has done all about the face and has had a lead for about a year in cleaning up and slimming down its massive portfolio. Aruba hasn’t started yet. But Cisco won’t be the only vendor with a head start. Cisco has to deal with second and third tier vendors coming together to create a comparable switching and routing portfolio that addresses both the enterprise and SP markets.
What does this mean for you?
I’m not going to sugarcoat it. As with any acquisition, the journey ahead will be fraught with obstacles for Juniper and HPE/Aruba customers. As this high-level merger unfolds, the company will seek to:
- Create a unique strategy that doesn’t just say “I’m a different type of Cisco.” This approach should give you some things to think about and questions to ask. Don’t accept what you read next week or vendor marketing slides, press reports or what other blogs say. This will take some time to resolve. Sellers usually promise bigger and more options through a classic “better together” story. But this is not vision and strategy. More options lead to more complexity and it takes a long time to get there.
- Streamlining/optimizing the portfolio, products and solutions. While HPE will try to assure you that nothing will change, it doesn’t make sense to keep everything, especially the multiple AP product lines (Instant On, Mist and Aruba AP), all routing and switching operating systems (Juno, AOS – CX, and ArubaOS), both management systems (Central and Mist). Although not immediately, the products will have to go, and the hardware that remains will have to change to accommodate cloud-based management, monitoring and artificial intelligence. This is what happened to Cisco with its routing, switching and wireless product lines after acquiring Viptela and Meraki. My bet? I believe Aruba Central will be phased out for Mist. This will take a few years to happen. If HPE stops adding features to Aruba Central, then take it as a sign that Mist is taking over here.
- Eliminate channel and sales redundancy. During M&A activity of similar portfolios, sales layoffs are eliminated. This will disrupt the channel and cause a lot of channel conflict between HPE Aruba and Juniper resellers. Juniper resellers will remain with Juniper for some time, but will eventually either leave the portfolio – unless the VAR was an HPE reseller – or be taken over by Arista.
This blog was written by Forecaster Michael O’Grady and Data Scientist Michael Kearney and originally appeared on here.
