The word on the street, as reported by the Wall Street Journal, is that HPE is getting ready to shell out $14 billion to acquire Juniper Networks, the company that played the gadfly for Internet routing and switching for industry behemoth Cisco Systems before Arista Networks took over that role in switching and is increasingly involved in distributed routing.
An acquisition could be announced as soon as this week, represented about a 35 percent premium over the market capitalization that Juniper Networks had before the rumors surfaced. As its fiscal 2023 year ended in October last year, HPE had $6.47 billion in cash and equivalents in the bank. So it will have to borrow some money or float some stock to get the dough to do a deal to takeover Juniper, which has been rebounding a bit in recent years and is still a player in datacenter routing.
HPE has a long history in Ethernet switching and made its own ASICs and equipment for many years, and in November 2009, in the pit of the Great Recession, the IT giant formerly known as Hewlett Packard acquired switch maker 3Com for $2.7 billion to fuel its datacenter aspirations. At the time, HPE was beginning its quest to build an IBM-alike conglomerate that would sell hardware, software, and services in the datacenter, with its $25 billion acquisition of Compaq in 2001 and its $13.9 billion acquisition of services provider Electronic Data Systems in 2008. In 2015, HP spun out its software, services, PCs, and printers to create HPE, keeping servers, storage, networking, tech support, consulting, and financing for datacenter gear.
Like Cisco, Juniper was initially focused on datacenter routing when it was founded in 1996, just as the corporate Internet was beginning its explosive buildout, and Pradeep Sindhu created a way to make routers work on data packets, not just voice circuits. Over the decades, Juniper has created routing and switching hardware as well as network operating systems, software-defined switching applications, and security products and has amassed a huge portfolio of intellectual property. Sindhu went on to found DPU startup Fungible in 2016, which was reportedly sold its assets off to Microsoft for $190 million this time last year as that company did not reach escape velocity.