Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks can move forward now that the companies have agreed to settle the lawsuit with the U.S. Department of Justice.
Filed with the United States District Court for the Northern District of California late on June 27, the agreement still needs the approval of a judge. The settlement also requires a unified HPE-Juniper to license the source code for Juniper’s Mist AI Ops software and to divest HPE’s Instant On wireless networking business.
In January, the DOJ sued to block the $14 billion sale of Juniper Networks to HPE. At the time, the DOJ said reduced competition in the wireless market is the biggest problem with the proposed buy. In its January statement, the agency noted that HPE and Juniper are the second- and third-largest providers, respectively, of enterprise-grade WLAN solutions in the U.S. behind market leader Cisco Systems.
The settlement comes less than two weeks before a trial was to have started on July 9. (See the full timeline of HPE’s bid for Juniper)
For many observers, the most interesting and potentially confusing part of the new agreement will likely be the DOJ requirement that the combined company auction Juniper’s AIOps source code.
The settlement ensures that key software assets will be available to rivals looking to compete with the merged company, the DOJ wrote in a June 28 press release: “The parties must hold an auction to license Juniper’s AI Ops for Mist source code—an important component in modern WLAN systems. The license will be perpetual, non-exclusive, and include optional transitional support and personnel transfers to facilitate competition.”
In HPE’s press release following the court’s decision, the vendor wrote that “After close, HPE will facilitate limited access to Juniper’s advanced Mist AIOps technology.”
In addition, the DOJ stated that the settlement requires HPE to divest its Instant On business and mandates that the merged firm license critical Juniper software to independent competitors. Specifically, HPE must divest its global Instant On campus and branch WLAN business, including all assets, intellectual property, R&D personnel, and customer relationships, to a DOJ-approved buyer within 180 days.
Instant On is aimed primarily at the SMB arena and offers a cloud-based package of wired and wireless networking gear that’s designed for so-called out-of-the-box installation and minimal IT involvement, according to HPE.
HPE and Juniper focused on the positive in reacting to the settlement.
“Our agreement with the DOJ paves the way to close HPE’s acquisition of Juniper Networks and preserves the intended benefits of this deal for our customers and shareholders, while creating greater competition in the global networking market,” HPE CEO Antonio Neri said in a statement. “For the first time, customers will now have a modern network architecture alternative that can best support the demands of AI workloads. The combination of HPE Aruba Networking and Juniper Networks will provide customers with a comprehensive portfolio of secure, AI-native networking solutions, and accelerate HPE’s ability to grow in the AI data center, service provider and cloud segments.”
“This marks an exciting step forward in delivering on a critical customer need – a complete portfolio of modern, secure networking solutions to connect their organizations and provide essential foundations for hybrid cloud and AI,” said Juniper Networks CEO Rami Rahim. “We look forward to closing this transaction and turning our shared vision into reality for enterprise, service provider and cloud customers.”
HPE set to gain AI technology
Since the deal was announced in January 2024, much acquisition chatter has been about AI technology for HPE.
“AI requires a modern networking foundation, from client to cloud, to connect data, and this foundation will be every bit as important as the silicon in unlocking the power and value AI holds as the world transition to this type of accelerated computing. A high-performance networking fabric is essential, and we are taking our networking position to a new level, one that will disrupt the industry and extend our network and AI expertise by leaps and bounds,” Neri told attendees at HPE Discover in Barcelona in November.
The combination of HPE and Juniper will take the network of the future a giant leap forward, Neri said: “The Juniper deal will be an essential piece of the puzzle. Because together, we expect to have a lineup of secure AI-native network solutions to deliver exceptional user experiences across all segments – enterprise, cloud and service providers.”
Source:: Network World