Partners View HPE-Juniper Deal with Cautious Optimism
Channel partners weigh in on the $14 billion HPE-Juniper acquisition and the impact it will have on the channel and end users.
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Allen Advisers Group CEO Philip Allen previously led the Aruba-focused partner Datavizion, and he has engaged with both HPE and Juniper in his new consultancy.
He said that HPE has historically taken an incremental approach with its acquisitions. The $2.7 billion acquisition of Aruba (announced in 2015) is one of the larger deals the company has made. HPE bought SD-WAN provider Silver Peak in 2020 for $925 million and integrated it into the Aruba portfolio. More recently, HPE bought 5G core service provider Athonet and Axis Security.
"Those acquisitions helped partners. They allowed for a more robust portfolio," Allen told Channel Futures.
The $14 billion bill for Juniper would seem to outweigh all of those. Moreover, Juniper previously was competing against HPE.
"This one's going to be different, as there's just an incredible amount of overlap between where Aruba and Juniper were positioning themselves," Allen said.
Juniper CEO and soon-to-be Aruba networking leader Rami Rahim on an analyst call said that "zero overlap" exists in the silicon both companies are developing. He did note, however, that both companies offer solutions for wireless LAN, campus switching and SD-WAN.
Insight Enterprises North American chief technology officer Juan Orlandini said that although HPE and Juniper do possess similar products in certain areas, they are filling key spots in their portfolios as a result of their deal.
Exactly how rationalization and integration will play out remains to be seen, Orlandini said.
"They're going to have to do some evaluation of some of the products that overlap slightly, products that overlap, and products where they actually compete with each other in the current lineup," said Orlandini, whose company was a 2022 Aruba Partner of the Year. "The important part of it is that there were gaps in both of their portfolios that the combined organizations are going to cover and complement each other. I think that's why it's a very good acquisition by HPE."
Allen said the sales teams of the vendors, and by extension their partners, will need to make a significant go-to-market pivot. Namely, Juniper sellers have been selling against HPE and Aruba in some cases, and vice versa. Now they'll need to show that these product portfolios are complementary to one another.
"In the short term, I think it's going to be a challenge to position the market. And I think in the short term that's going to result in some loss of opportunity for partners. I think it's going to potentially result in some degradation of sales for Aruba," Allen said. "Long-term, I think adding Mist and those AI capabilities are probably going to prove themselves out to be successful."
HPE and Juniper have framed the acquisition as part of an "an AI-driven agenda." Allen said Juniper's Mist offering could give partners like him a deeper solution for customers' many questions about AI. The sooner those portfolios and the marketing message behind them can come together, the sooner he can add more value to end-user customers.
"How soon and how well will it all be integrated to a point where I've got a story to tell that doesn't sound convoluted?" Allen said. "Where I can leverage the AI argument from Juniper Mist to say, 'Here's how you, the customer, can leverage any variety of these combinations.'"
HPE said that the deal will likely close at the end of 2024 or the beginning of 2025. But when will the full integration of different elements – both products and partner programs – occur?
Allen said he expects it to move faster than before.
"Typically they've let those acquisitions run fairly autonomously for a while. I suspect there might be some reasons this time to roll it into the fold a little tighter and a little quicker than they've traditionally done," he said.
How do the two vendors engage with the channel differently?
Orlandini pointed to significant differences, shaped in part by the different sizes and focuses of the companies.
"HPE is a much larger organization than Juniper was, and because of the nature of that and being a portfolio organization, there was a much different conversation that you had with the HPE sellers than you had with the Juniper sellers," Orlandini said. "Because relatively speaking, Juniper was much more laser-focused on one particular segment. HPE sellers, because they have such a breadth of product offerings, were focused on a significantly larger one."
Allen said he sees a "continuum" taking shape in the world of networking hardware. And that's a movement he says moving toward "complete, managed, self-healing network services."
"Network equipment has been fundamentally the same. It gets faster, it gets smaller, it uses less power. It gets more ports. It gets more dense. And then we start to talk about AI and Mist and identify problems ahead of time and minimize downtime and streamline operations," Allen said.
And for partners moving through that continuum, Allen said he wonders if the logical destination is John Chambers' network-as-a-service focused Nile startup, rather than traditional hardware providers.
"It strikes me that it seems like we're headed toward what John Chambers and the Nile team are doing on that side of things. So we're taking a serious look at how we might be able to integrate some of those offerings," Allen said.
Allen said he sees a "continuum" taking shape in the world of networking hardware. And that's a movement he says moving toward "complete, managed, self-healing network services."
"Network equipment has been fundamentally the same. It gets faster, it gets smaller, it uses less power. It gets more ports. It gets more dense. And then we start to talk about AI and Mist and identify problems ahead of time and minimize downtime and streamline operations," Allen said.
And for partners moving through that continuum, Allen said he wonders if the logical destination is John Chambers' network-as-a-service focused Nile startup, rather than traditional hardware providers.
"It strikes me that it seems like we're headed toward what John Chambers and the Nile team are doing on that side of things. So we're taking a serious look at how we might be able to integrate some of those offerings," Allen said.
As the dust settles from HPE announcing its $14 billion acquisition of Juniper Networks, channel partners from both companies are waiting to see how the companies will integrate their product portfolios, and how long that will take.
HPE announced the megaacquisition Tuesday afternoon. The deal will slot Juniper into the Aruba networking business and challenge both company's larger rival Cisco.
And for channel partners, the marriage could give them more ammo in customer engagements.
"If I was going into a fight before, I had one gun: Aruba," Allen Advisers Group CEO Philip Allen told Channel Futures. "Maybe I sell some of these others as well, like Arista. But now it's almost like I've got a double-barrel gun that I can come to the fight with."
Philip Allen
Partners on the HPE side say they could benefit from an infusion of AI capabilities in Juniper's Mist AIOps platform. But it remains to be seen how exactly Juniper's portfolio will match with elements of the Aruba business. They have historically competed with each other in certain areas, partners said.
"It should be an interesting journey as they merge the organizations and then rationalize the products that HPE and Juniper already have come out with the final set of solutions that they're combining," said Juan Orlandini, Insight Enterprises' chief technology officer for North America.
Insight's Juan Orlandini
For Juniper, HPE brings a deep base of partners that can sell its offerings. And Juniper partners will expand their portfolio as a result of the deal.
Orlandini said he's taking a wait-and-see approach to the acquisition, which should close at the end of 2024 or beginning of 2025. But he said he views the acquisition positively.
"It's healthy for both of those organizations. I think it's healthy for the industry," Orlandini told Channel Futures.
Read more about Orlandini and Allen's perspectives on the HPE-Juniper acquisition in the slideshow above.
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