What could HPE-Juniper deal mean for the two firms

Hewlett Packard Enterprise (HPE), the US-based IT firm, is currently in talks to acquire Juniper Networks, a network gear maker, for approximately $13 billion. This move is aimed at enhancing HPE's artificial intelligence (AI) offerings, according to a report from the Wall Street Journal on Monday. 

As per the report, sources familiar with the matter suggest that an official announcement about the deal may happen this week. This acquisition aligns with HPE's strategic focus on advancing AI capabilities, highlighted by the recent introduction of a cloud computing service tailored for AI systems, akin to technology used by ChatGPT. 

This deal positions HPE to compete with Cisco, the leading provider of networking switches. HPE has made significant strides in the networking sector, including the acquisition of wireless specialist Aruba Networks in 2015 for $3 billion. 

Juniper Networks is known for its high-performance network and service offerings, covering routing, switching, Wi-Fi, network security, AI-enabled enterprise networking operations (AIOps), and software-defined networking (SDN) technologies. 

Recent growth in Juniper Networks' enterprise networking business is attributed to its transformation around software and the integration of AI into various network aspects. In addition to selling network hardware, Juniper Networks operates Mist Systems and its Mist AI platform, a competitor to Cisco Meraki and HPE's Aruba's Edge Services Platform. Acquiring Juniper, and consequently Mist, would strengthen HPE's AI segment. 

During a keynote at HPE's Discover event in Barcelona, HPE CEO Antonio Neri referred to AI as "the most disruptive technology of our lifetime." 

This potential acquisition comes at a strategic time for HPE, following a 31% year-on-year decline in server revenues, its largest division, in Q4 of fiscal 2023. The Intelligent Edge networking unit saw a 40% year-on-year sales increase, along with a 37% growth in the AI and HPC unit. 

Last year, Juniper Networks announced a global round of layoffs and initiated a $59 million restructuring plan to realign around "long-term growth opportunities." The possible acquisition by HPE adds another dimension to Juniper's ongoing evolution within the networking industry.