On January 30, 2025, the US Department of Justice (DOJ) moved to block the acquisition of Juniper by HPE. The DOJ is concerned about 60% of the wireless LAN (WLAN) market being occupied by two vendors (HPE and Cisco) and that it would stifle any innovation from other vendors that have single-digit market share. HPE and Juniper have started to contest this ruling with various counterpoints regarding WLAN competition, a classic “better together to fuel innovation” story, and a cautionary tale regarding network security, especially for the next generation of emerging technology.
The DOJ is not wrong that sleepy, mature markets like IT networking struggle with innovation without the push from startups. Today, innovation in networking is hard to come by. It’s been a while (early 2000s) since the major networking players drove innovation in the market, such as the creation of new protocols and architectures to help networking organizations overcome technology challenges. Since the 2010s, there has been a chasm. Any innovation in this space has mainly come from two areas: 1) startups like Meraki, Mist, Nicira, and Viptela; and 2) large customers like Facebook and Google. The large cloud providers have been lighthouses for networking professionals in need of guidance on data center best practices, how to automate networks, and alternative network architectures.
The enterprise Wi-Fi market hasn’t moved the needle much, either. Despite being around for 25 years, Wi-Fi solutions hardly do more than connect laptops and mobile phones in office settings and have real difficulty adapting to the new ways that users want to leverage other wireless protocols. Few attempts have been made to improve the management experience of supporting the various device types, including IoT devices. Few solutions support basic connections into Bluetooth, EnOcean, NearLink, Thread, and Zigbee technologies. To HPE Aruba’s credit, it has one of the strongest IoT-ready wireless solutions available, offering a strong smart office and retail portfolio featuring AI security insights, edge computing solutions, and IoT data processing capabilities. However, much of this capability came from the innovation under past Aruba leadership/visionaries, Dominic Orr and Keerti Melkote.
And that’s just WLAN. This lack of innovation is systemic across the entire IT networking world. The biggest gap is at the edge (manufacturing plants, stadiums, stores, aircrafts, etc.), where nontraditional devices need connectivity. With over 100 billion IoT devices, the market is vast, driven by new applications, devices, security needs, and hardware requirements. Networking at the edge faces significant challenges, such as wireless interference and troubleshooting in distribution centers. The industry needs business-optimized networks (BON) with verticalized solutions.
Where does that leave us?
The IT networking world needs a hero: someone with the resources and the will to revolutionize the industry. Realistically, that isn’t going to come from a tiny startup. But the big players have been focused on market share, marketing, and margins. Change will require true leadership.
Will the DOJ’s action to block the Juniper acquisition save innovation in networking? No. Would the acquisition unlock new innovation? Unlikely. But we’d love to be wrong (see below). Why is it hard to imagine this rosy future? Every major public technology company struggles to fund revolutionary innovation when there are shareholders to satisfy. Realistically, efficiencies gained from a combined portfolio/organization largely go to shareholders, not to fund new organic innovation. And it’s far easier to justify innovation via one-time acquisition costs rather than an ongoing stream of unrealized innovation.
Ultimately, either future could hold good news for customers if they are put front and center. Let’s look ahead at the possible outcomes and what each path could entail:
Scenario 1: HPE and Juniper remain separate
HPE’s broader portfolio paired with its Aruba footprint has a real opportunity to be an edge networking innovator that creates verticalized easy-to-use solutions. In a time when almost every vendor is claiming to have cloud-native, AI-driven platform solutions, HPE is the only networking vendor that has the resources and portfolio today — such as compute, multilayer stack, storage, and software — to put together an edge, IoT, and networking solution to deliver a BON solution for retail and other adjacent verticals, such as hospitality. No one else is making big bets, turning their backs on generic technology providers, and choosing a few verticals to go after. This could be HPE’s moment to reclaim its innovator culture of yesteryear to truly own edge and network verticalization.
Juniper’s technology and executive team are ahead of the game with its an AI-driven networking platform, Mist, that unifies the management and monitoring across various networking and security components. Mist innovation is how Juniper grew its WLAN market share so quickly over a short period of time and posed an issue for the competition, including HPE. With more investments, Juniper can continue to disrupt the management of data center and campus networking market with its Mist leadership — under Bob Friday and Sujai Hajela — and Marvis AI solution. As such, Juniper would create a businesswide networking fabric solution, which is essential for the future of networking. Looking forward, the company can expand on its networking platform by seamlessly integrating security services, with Marvis as its foundation to automate the secure networking platform. At this stage, Juniper would just be running up against Extreme’s networking platform, its version of a secure businesswide networking fabric. Cisco, Huawei, and others would be hard-pressed to match Extreme’s and Juniper’s platforms.
Scenario 2: HPE acquires Juniper
A combined organization can take the superpowers from both groups to create a dominant force in IT networking; but in practice, it’s too tempting to focus on fast cash for shareholders with the greater leadership from the acquired party choosing to quickly move on as soon as their contract terms allow.
To position a combined HPE/Juniper for success, Juniper leadership should take the helm of innovative progress across its portfolio to ensure products like Mist don’t get stifled as the engineers integrate into the Aruba portfolio (Axis, ClearPass, Cape Networks, Silver Peak, etc.). There will likely be some portfolio rationalization. Customers with Aruba switches and hardware should get a five-year transition plan to JunOS. Meanwhile, HPE networking engineers should spearhead the industry innovation and solutioning to bring together the edge-to-cloud story in the chosen industries. This will require working side by side with the HPE GreenLake team to expand on smart office solutions and retain store capabilities. Hospitality would be the next big industry to tackle by combining the smart office and retail store solutions.
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