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The big picture: In the few years after it was founded following the split of the original Hewlett-Packard entity in 2015, HPE has acquired many competitors in different market segments. Now the corporation is seemingly interested in swallowing up network device maker Juniper, and the growing market for AI is part of the plan.
Soon after rumors about a potential takeover began to appear online, Hewlett Packard Enterprise (HPE) has now officially announced that it plans to acquire Juniper Networks. The deal is currently valued at $40 per share, which would translate to a total cost of $14 billion for HPE.
Juniper Networks sells routers, switches, and many network-related services and technologies, while HPE is a jack of all (tech) trades that also happens to offer some networking products. With the Juniper acquisition, the Texas-based corporation expects to essentially double the size of its own networking business. If everything goes according to plan, HPE would base half of its yearly operating income on network products alone.
HPE is already well versed in the networking business, in part thanks to past acquisitions of competing companies such as Aruba (2015) and 3Com (2009). A successful Juniper deal would be the largest merger in the entire Hewlett Packard's history since the financial disaster of HP Autonomy.
According to CEO Antonio Neri, HPE is interested in exploiting the growing interest of the tech world for AI and AI-based products. In a buzzword-filled statement, Neri said that the acquisition would strengthen HPE's position "at the nexus of accelerating macro-AI trends," expand the company's total addressable market, and drive innovation for customers crossing the bridge between "AI-native" and "cloud-native" worlds.
The acquisition would of course generate "significant" value for shareholders as well, Neri remarked in his statement. Juniper is also highlighting its newest AI-based offerings such as the Mist line of wireless LAN and switching products. The company now employs machine-learning algorithms, chatbots and AIOps (Artificial Intelligence for IT Operations) features to ease sysadmins' burden in identifying network issues.
The Juniper acquisition would expand HPE's networking portfolio, but it could also result in the overlapping of two previously competing businesses. The $14 billion merger would also need approval from antitrust agencies around the world, as the operation could be considered too disruptive for existing Juniper and Aruba customers.