Hewlett Packard Enterprise (HPE) has announced a $14 billion acquisition deal with networking equipment maker Juniper Networks. HPE sees this as a major step forward in its AI and hybrid cloud strategy, positioning the company for growth in the AI market. The deal is expected to close late this year or early next year. HPE CEO Antonio Neri stated that the acquisition will create a new networking leader with a comprehensive portfolio, doubling HPE’s networking business. The deal will add $11.2 billion to HPE’s debt. The timing of the deal aligns with the AI gold rush, with companies investing heavily in AI capabilities.
HPE has already seen the benefits of the AI industry’s growth, as orders for servers containing accelerated processing units for AI use accounted for 32% of its server segment. The company’s overall net revenue for 2023 was down 6% compared to the previous year, amounting to $7.4 billion. HPE views AI as a disruptive workload and sees networking as a critical component in the AI ecosystem.
This acquisition marks HPE’s largest acquisition to date and demonstrates the company’s commitment to strengthening its secure access service edge (SASE) offerings. HPE began offering single-vendor SASE to customers after acquiring security service edge vendor Axis Security. Juniper, although the lowest-rated vendor in Gartner’s Magic Quadrant for single-vendor SASE, has also made investments in native SASE capabilities.
HPE has a long history in Silicon Valley and was founded in 2015 after the split of predecessor firm Hewlett-Packard into separate business- and consumer-focused companies.