Hewlett Packard Enterprise (HPE) has announced its plan to acquire Juniper Networks for $14 billion this week. The aim of this acquisition is to double HPE's networking business and narrow the gap on generative AI. The price offered by HPE is more than 30% higher than Juniper's existing share price, which caused HPE's own share price to dip. This acquisition is a strategic move for HPE, which had already made a significant push into networking with the purchase of Aruba Networks. Juniper is well-known for its communication and network services, offering routers and switches to various industries, including technology, telecommunications, and finance. Juniper also operates Mist AI, which is an ML/AI business that is positioned to compete against Cisco Meraki and HPE Aruba’s Edge Services Platform (ESP).
While the industry press has done a great job reporting on the news and analyzing the strategic fit, only ETR is unique position to report on the competitive data directly from both companies' end users. In this article, ETR leverages its most recent JAN24 TSIS data to look at both the company's future spending intentions and their joint customer-shared accounts analysis.
HPE Data Overview. According to recent data, spending intentions for HPE across all sectors and product areas have been declining for two years, but there was a strong rebound in their aggregate Net Score from 4.3% to 7.6% in JAN24. Among individual product areas, Aruba stands out as the strongest performer in HPE's portfolio, with a recent JAN24 Net Score of 33%, more than double the Net Score of the Networking sector at approximately 15%. Aruba's Pervasion, a measure of how well penetrated a vendor is within ETR's ITDM community, is also high at 20%, which is higher than the average Pervasion level for the entire company.
ETR Data: In the JAN23 Technology Spending Intentions (TSIS) survey, Aruba garnered 150 unique customer citations and a Net Score of 33%, bouncing off the all-time lows captured in the prior OCT23 survey of 24.5%. The rebound was driven by more customers shifting from prior plans of Flat spending towards Increase indications for the calendar year 2024.
Juniper Data Overview. ETR tracks Juniper in both the Information Security and Networking sectors. Within the Networking sector, Juniper garnered 169 unique customer citations for a 4.7% Net Score. Overall spending intentions for the company have been on a longer-term declining trend for the past two years; however, the vendor has now seen two consecutive quarters of positive trajectory driven by a return to Adoption indications. In fact, in the most recent JAN24 survey period, 7% of those 169 respondents cited plans to newly Adopt the vendor within the Networking sector (see the chart below). Similar to Aruba, Juniper is well penetrated in the sector, with a Pervasion rate of 21%.
Shared Accounts Analysis. Leveraging ETR's proprietary shared accounts models, we can analyze how these two vendors perform within each other's customer base. In this instance, we begin by curating a sample of all HPE and Aruba customers within the networking sector and then query how other selected networking vendors fare within those customer accounts. As you can see in the data visualization below, among the 210 HPE and Aruba customer accounts, Juniper has 84 shared citations for a very elevated 40% shared citation overlap percentage. This data tells us that the two combined companies often co-exist in the same end-user organizations. However, within those 84 accounts, Juniper's spending intentions are very low, with a shared Net Score of only 1%. This data suggests that although many HPE customers still use Juniper networking products, the trajectory of their spending growth for those products is minimal.
As many industry articles have suggested, this acquisition was a strategic move designed to target Cisco's strength within the Networking space. As the data visualization below illustrates, Cisco is by far the most penetrated within HPE's accounts, with a massive 73% shared citation overlap percentage. In addition, Cisco Meraki also demonstrates the highest spending within those HPE accounts, with a Net Score of 31%, which has accelerated over the last year. Meanwhile, the core Cisco Networking business has declined recently, trending from a 22% Net Score to 14% within HPE's accounts.
In sum, according to the ETR's data, while Juniper has a strong overlap with Aruba Networks accounts, spending intentions remain muted for Juniper in Networking entering 2024. Meanwhile, key competitor Cisco remains well established within HPE's accounts; ETR will continue to monitor the competitive intelligence and spending intentions data across these companies' product lines to see how this strategic acquisition is received by the end-user ITDM community.
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Enterprise Technology Research (ETR) is a technology market research firm that leverages proprietary data from our targeted IT decision maker (ITDM) community to provide actionable insights about spending intentions and industry trends. Since 2010, we have worked diligently at achieving one goal: eliminating the need for opinions in enterprise research, which are often formed from incomplete, biased, and statistically insignificant data. Our community of ITDMs represents $1+ trillion in annual IT spend and is positioned to provide best-in-class customer/evaluator perspectives. ETR’s proprietary data and insights from this community empower institutional investors, technology companies, and ITDMs to navigate the complex enterprise technology landscape amid an expanding marketplace. Discover what ETR can do for you at www.etr.ai
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