HPE CEO Antonio Neri ‘Confident’ Juniper Deal Will Close Early Next Year, Sees Networking As ‘Biggest Upside’ For 2025

‘We’re working through the process,’ said HPE CEO Antonio Neri. ‘We’re confident this will close in the early part of 2025, and we are working very, very collaboratively with the [Department of Justice]. So nothing gives me pause this will not happen.’

Hewlett Packard Enterprise CEO Antonio Neri Thursday told analysts that he is “confident” that HPE’s $14 billion acquisition of Juniper Networks will close early next year, opening the door to networking as the “biggest upside” for HPE in 2025 and beyond.

“We’re working through the process,” said Neri. “We’re confident this will close in the early part of 2025, and we are working very, very collaboratively with the DOJ (Department of Justice). So nothing gives me pause this will not happen.”

Neri’s comments come in the wake of a Bloomberg report last month that HPE and Juniper representatives had met with DOJ regulators in a bid to prevent an antitrust challenge to the acquisition.

With a combined portfolio of “modern, secure networking solutions,” the combined companies’ “enhanced ability to compete and innovate will fundamentally improve the networking industry,” said Neri.

Furthermore, Neri said the deal will strengthen U.S. national security interests by advancing HPE’s position as a “strong U.S. innovator” among global technology companies.

Once the HPE-Juniper networking deal is finalized, Neri has said, HPE will be a networking company at its core with an $11 billion networking business that represents about one-third of the company’s revenue and more than 50 percent of its profits.

Looking at “margins and contributions from each of the businesses”, Neri said he sees networking as the “biggest upside HPE will have in 2025 and 2026.”

Juniper provides the data center networking muscle that will provide critical AI functionality with a robust 800GbE network router that will provide data-center-to-data-center interconnectivity.

HPE, meanwhile, will provide the HPE Slingshot interconnect 400 network fabric with an open architecture that will play a “massive role” as customers look at potential AI network solutions, said Neri.

“Networking needs to catch up to the demands of AI,” said Neri. “That is why we believe that the combination of HPE and Juniper is so important to drive that next wave of innovation. Networking clearly is going to be a topic for 2025 and beyond.”

The Channel Opportunity

Pat O’Dell, general manager and managing partner for Clinton, N.J.-based CPP Associates, said he and his team are looking forward to the big impact a combined HPE-Juniper will have on the market.

In fact, O’Dell said he and his team are ready to bring the full HPE-Aruba Juniper networking portfolio to customers. “We’re ready to go,” he said. “We’re going all-in on Juniper. Networking is now the most important segment for HPE. If you want to be a successful HPE partner, you have to be proficient selling the networking portfolio.”

O’Dell said the good news for partners is there is little overlap between the Juniper and HPE Aruba network portfolios.

“This is very accretive to our business,” he said. “Now we can sell Juniper Mist AI, which automatically resolves network issues and eliminates help desk requests. We also get access to the higher-end networking fabric of Juniper. This could easily double our AI and networking business. We’re super excited about the opportunity.”

By The Numbers

The sanguine outlook for the HPE-Juniper combination came with HPE reporting better-than-expected results for its fourth fiscal quarter, ended October 31.

HPE reported “record” quarterly sales of $8.5 billion, up 15 percent in constant currency from $7.71 billion, well above the Zacks consensus estimate of $8.23 billion. HPE also reported a “record” non-GAAP operating profit of $938 million.

HPE reported non-GAAP earnings of 58 cents per share, up 12 percent from the year-ago quarter, and three cents above the Zacks consensus estimate of 55 cents per share.

In after-hours trading, HPE shares were up five cents to $21.70, coming after the strong results and a Morgan Stanley upgrade for HPE shares with a target price increase from $23 to $28.

Among the highlights of the quarter were quarterly AI systems revenue growth of 16 percent to $1.5 billion; server revenue of $4.7 billion, up 32 percent from the year-ago quarter; and hybrid cloud revenue of $1.6 billion, up 18 percent from the year ago period.

HPE GreenLake pay-per-use cloud services helped drive annualized revenue run rate growth of 48 percent to $1.9 billion. HPE added 2,000 GreenLake customers in the quarter, with the total GreenLake customer count now at 39,000.

Neri said the key to HPE’s success in the quarter can be described with “one word: innovation.” In fact, he said, HPE’s innovation strategy is making HPE more “relevant” in the eyes of customers.

Neri said he is “excited” about the outlook for 2025 given the HPE-Juniper combination and the innovation that HPE continues to bring to customers.

“We expect the pending acquisition of Juniper Networks to further enhance our portfolio, providing customers with complete edge-to-cloud solutions,” he said. “I am extremely excited about the significant opportunity we have in the coming fiscal year to drive increased value for our shareholders. I am optimistic about what we can achieve and look forward to the year ahead.”