Summary Bullets:

• The addition of Juniper’s enterprise business is unlikely to have a serious anticompetitive effect on the robust campus access market, which includes LAN and WLAN networks, as well as the management and policy software that runs them.

• Juniper will make HPE’s data center business more attractive to enterprises, but often the server/storage decision and networking decision is made separately, especially in greenfield situations.

The UK’s Competition and Markets Authority (CMA) has started an investigation into HPE’s plan to acquire Juniper Networks, which is set to complete in late 2024 or early 2025. With a deal size of approximately $14 billion dollars and HPE’s position in the enterprise infrastructure market, it’s not a surprise that the deal is receiving scrutiny by regulators. There has been a spate of acquisitions in the tech sector that have been blocked in the last few years, including Nvidia buying Arm and the CMA also put the acquisition of VMware by Broadcom under considerable scrutiny.

At this point, it’s unclear if this action by the CMA is simply a part of the normal acquisitions process, or if it is a sign of trouble for the acquisition. HPE itself is generally considered to be one of the top four Ethernet vendors, along with market leader Cisco, Huawei, and Arista. According to public documents, the enterprise business at Juniper is approximately half its business. Its two other segments are service providers and cloud, both areas where there is little to no overlap with HPE. The point of contention therefore is around the enterprise business.

The addition of Juniper’s enterprise business is unlikely to have a serious anticompetitive effect on the robust campus access market, which includes LAN and WLAN networks, as well as the management and policy software that runs them. HPE does not have networking businesses of consequential size in service provider, cloud, or data center markets. However, HPE’s data center business with its myriads of servers, storage, and software will be enhanced by the addition of Juniper. HPE will be one of three companies that have servers, storage, and networking under one roof, along with Huawei and Dell. Juniper will make HPE’s data center business more attractive to enterprises, but often the server/storage decision and networking decision is made separately, especially in greenfield situations.

The technology market does suffer from ‘too big to fail’ companies that command an outsize influence and attention. More competition is always good – but in this case, it will not make enough of a difference to the enterprise networking market as a whole to warrant blockage by governments.