This article originally appeared in Light Reading.
Mega mergers between community gear distributors do not have a terrific monitor document. The varied corporations bolted collectively to kind immediately’s Nokia have at instances this century seemed like a Frankenstein’s monster of elements lurching from one mishap to a different. So, when HPE, with its $29 billion in annual gross sales this yr, revealed plans to accumulate the $5.6 billion-a-year Juniper Networks, many long-in-the-tooth business observers could have questioned the knowledge of the $14 billion transfer.
Some are involved telecom will develop into much less of a precedence after Juniper, with its biggish service supplier enterprise, is subsumed into the a lot bigger HPE, which caters primarily to enterprise prospects. For others, the combination of HPE’s Aruba networking enterprise with Mist, an overlapping unit at Juniper, is the place the deal might flip nasty. Pitching the why and the way of all this to prospects, traders, and companions seems difficult, to say the least.
But quite a few analysts have made broadly positive remarks in regards to the acquisition. And one senior telco government, talking on situation of anonymity, additionally believes there’s a sturdy rationale for a merger of the IT and networking gamers. To beat the doubts and promote what HPE and Juniper might do in tandem, HPE boss Antonio Neri made a high-profile look final week in Barcelona at Cellular World Congress. Devoted to networking and associated issues, the commerce present this yr attracted greater than 100,000 guests, in line with the GSM Affiliation (GSMA), its organizer.
In an surroundings that backed up his claims, Neri was fast to dismiss any suggestion that an HPE-and-Juniper combo could have a diminished curiosity in telecom. Even earlier than the Juniper takeover, he informed Gentle Studying, telecom is one in every of HPE’s two largest verticals, the opposite being monetary providers. HPE’s compute methods are already embedded within the gear offered by the likes of Ericsson and Nokia, he stated, whereas some 40 operators worldwide have concerned HPE of their virtualization efforts. “The Juniper acquisition makes us much more related within the telco house.”
A ‘Robust Various’ to Cisco
However the broader deal logic is about making a a lot stronger, AI-fit rival to Cisco, the large competitor to Juniper out there for Web routers and switches. “We’ll clearly be the sturdy different,” stated Neri. He stated he’s assured that pooling the applied sciences of HPE and Juniper will produce capabilities “Cisco doesn’t have.” And he reckons the most important long-term alternative lies in what the business refers to as “AI inferencing.”
Till now, a lot of the AI motion has taken place inside hyperscalers’ knowledge facilities, the place clusters of Nvidia’s costly graphical processing items (GPUs) have been set to work on coaching giant language fashions (LLMs) for generative AI (GenAI). On the inference stage, when dwell knowledge is uncovered to completely educated fashions, AI functions might feasibly have much less want for compute energy, permitting corporations to host them in smaller “edge” services a lot nearer to finish customers. “I feel this imaginative and prescient of edge computing changing into AI inferencing on the finish of the community is very large for us,” stated Neri.
One aim, then, is to “reverse combine” a few of HPE’s AI and software program belongings into the portfolio of merchandise that Juniper sells for metro space networks. The place GPUs are deployed, HPE and Juniper will be capable to place Ethernet, a know-how well-known to the telco sector, as an choice for connecting chip clusters. To this point, that job has been dealt with primarily by one other know-how known as Infiniband. However the Infiniband market is dominated by Nvidia, the identical powerhouse behind the GPUs. Howard Watson, the chief safety and networks officer of BT, is one government who sounds excited by the prospect of a viable Ethernet different.
By its GreenLake service, marketed by Neri as a “hybrid” cloud, HPE has additionally began leasing GPUs and auxiliary merchandise (suppose liquid cooling, house, knowledge heart providers) to prospects apprehensive about knowledge privateness and the dangers of leakage. “We have been constructing it for a yr as a result of clearly it is advisable convey the ability and the cooling and get entry to GPUs, however now we’re operational within the US and we’ll be operational in Europe this yr,” stated Neri. Corporations are charged on a pay-as-you-go foundation for entry to GPUs which might be solely theirs. “The Juniper acquisition provides us a really sturdy core basis as a result of ultimately, wherever you do it, you want a community to attach all this stuff,” he added.
However what about that obvious overlap between Aruba and Mist? Each are related within the campus surroundings, and each would appear to contain some use of AI for community administration. From Neri’s perspective, the mix is sensible as a result of it marries Aruba’s muscle to Mist’s AI crown jewels. “You’ll be able to envision taking the Mist AI-driven tech and integrating it with Aruba for scale, with higher visualization of the community and automation,” he stated.
Aruba, he factors out, presently manages about 4 million units linked to roughly one billion buyer endpoints. At the moment, it serves greater than 30,000 prospects. That provides it a scale roughly seven to 10 instances greater than Mist’s, Neri believes. Whereas the small print of the combination plan have but to be finalized (or are merely not being disclosed forward of the transaction), what’s clear is that HPE will contribute three main elements on this space: silicon utilized in campus and department networks; entry level designs; and Aruba OS CX, an working system on the switching degree.
Journey to the Heart of the Telco
A giant query is whether or not potential prospects will likely be ready to spend cash on edge-based AI. Neri thinks there will likely be an urge for food for funding amongst telcos in addition to enterprise purchasers. “I feel they see a chance by the community to increase their 5G into inferencing,” he stated. Presently minus a income development story of their very own, operators have not too long ago made hefty cuts to capex budgets. However Neri downplays any read-through for HPE’s ambitions. “I do not suppose it’s essentially all that capex-intensive due to the as-a-service enterprise fashions you’ll be able to deploy,” he stated, undoubtedly with an eye fixed on GreenLake.
There might be alternatives of a extra conventional nature in telecom, too. Like Dell, its fierce rival within the server business, HPE is slowly chewing into the marketplace for home equipment, gear devoted to particular networking duties. Earlier than MWC began, Canada’s Telus stated it will use Intel-based HPE servers as a substitute of purpose-built gear in elements of its radio entry community (RAN). “I feel the know-how stack has matured to a degree the place individuals are extra comfy,” stated Neri.
Whereas he guidelines out an HPE transfer into RAN software program – one that might put him in direct competitors with Ericsson and Nokia – HPE has already taken steps within the 5G core. In addition to flaunting a portfolio of six core virtualized community capabilities, it final yr purchased a small Italian software program firm, Athonet, recognized for its position in non-public 5G. Amongst different issues, Athonet immediately supplies the core community know-how that Vodafone provides in a service bundle to lots of its personal enterprise prospects.
Might Athonet even be an choice for public 5G core networks, the place telcos would sometimes depend on an Ericsson or Nokia? “Positively,” stated Neri. “With the acquisition of Juniper, we are able to do issues that speed up each the deployment of Athonet within the core and the expansion of Juniper within the service supplier house.” An Athonet transfer into that more and more aggressive sector will likely be value watching. However Juniper’s established gross sales channels and know-how popularity clearly will not harm.
