The problem for HPE here is that despite their greater strategic influence as IT vendors, all the data center elements are commoditizing just like networks are. Apparently having influence isn’t the same as making a business case. HPE needs to green up some of the brown fields of IT. They need a set of new business cases that will drive the new applications that will justify the new computing and demand more networking. That’s a long value chain to follow, and we don’t have any clear signs that HPE or Juniper can avoid kinking the chain along the way. We do, though, have some signs about what the business case will have to look like, and maybe that can lead us to what HPE has in mind.
There have been three times in the last 70 years when enterprise spending on information technology grew faster than GDP. The first was the mainframe era, the second the minicomputer period, and the last the PC. The benefit transformation was batch computing to online transaction processing to personal computing, and every step brought IT closer to workers. Then it stopped, so logically a hot business case would get it started again, but what? Answer: Point of activity empowerment, through real-world, real-time computing.
Suppose we imagine an enormous virtual-metaverse digital twin of the real world. Suppose it’s made up of many smaller digital twins—twins of rooms, buildings, towns and cities, all connected by networks. Suppose that consumers and workers have a foot in both worlds, and that their footing in the virtual world lets us give them all the information they need to do their jobs or live their lives, right at the point and time they need it. How much would that be worth in productivity, in quality of life? Network and IT operations have gotten more complicated as workers went from getting sales slips keypunched onto cards to an age where they entered things in real time and their computer talked to their company’s computer. Imagine how complicated it would be to make this real-world-connected-digital-twin thing work? Failing globally at the speed of light is not an option. We need a superintelligence on our side.
Like what AI provides, and like Juniper has just announced with its AI-Native Networking. Juniper also has a foot in the compute door, with their universal data center virtualization tool, Apstra, and it’s also now included in its AI-Native Networking. It’s not clear that AI-Native Networking is so critical to current network/IT operations that it would make the HPE acquisition a big success under current conditions, but it very likely would be if HPE pushes point-of-activity empowerment. The combination of HPE and Juniper could then be essential in realizing the dream. It may be that a fear of what AI could mean in this application has driven Cisco’s recent relationship with Nvidia to bring AI into Cisco networks, too.
The obvious risk here is that the HPE/Juniper deal might not close for a year. During that time, every competitor will have an opportunity to assess what the combined company might do, and to work out countermeasures. But HPE and Juniper could take that same year to do creative things of their own, dream of things others couldn’t easily counter.
The risk in all of this is that you can’t realize dreams you don’t have, and we don’t know what HPE is dreaming here and now. Just because most of the justifications offered for acquiring Juniper are weak doesn’t mean that HPE didn’t pick one of them. The real-world-real-time opportunity hasn’t emerged this year, even if IBM’s threat to HPE has. HPE didn’t recognize the real-time opportunity earlier, nor did Juniper. Can they emerge from tactics and quarterly reports and dream? Robert Kennedy had a saying that’s appropriate here. “Some men see things as they are and ask ‘Why?’ I dream of things that never were and ask ‘Why not?’” Well, HPE, why not?
