Analysts Question DOJ’s Market Analysis In Lawsuit To Block HPE’s $14B Acquisition Of Juniper Networks
Summary
I think the DOJ’s thesis that this slows down innovation is backwards.’ Top market research analysts are questioning the market analysis laid out in the U.S. Department of Justice’s 21-page complaint alleging Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks would “reduce competition and weaken innovation.” In its lawsuit, which focused heavily on the wireless LAN market, the DOJ claimed that the HPE acquisition of Juniper Networks would “eliminate fierce head-to-head competition between HPE and Juniper, raise prices, reduce innovation, and diminish choice for scores of American businesses and institutions, in violation of Section 7 of the Clayton Act.” The DOJ said the proposed transaction between HPE and Juniper, if allowed to proceed, would further consolidate an already highly concentrated market — and leave U. S. enterprises facing two companies commanding over 70 percent of the market: the post-merger HPE-Juniper and market leader Cisco Systems Inc. [Related: DOJ Sues To Block HPE’s $14B Acquisition Of Juniper Networks Deal: 5 Things To Know] But Crawford Del Prete, president of IDC, the global market research intelligence firm headquartered in Needham, Mass, said a combined HPE and Juniper Networks accounted for only 20.4 percent of worldwide revenue in the wireless LAN market for the first nine months of 2024 compared with 41 percent for Cisco Systems and 7.9 percent for Chinese networking company Huawei. “Isn’t that what Cisco did with Meraki [which Cisco acquired for $1.2 billion in 2012]?” When the blockbuster HPE deal was first announced a year ago, IDC believed the big benefit would be HPE’s access to the “data center and service provider market which is super, super hot given an AI enabled world,” said Del Prete. “If the deal is completed you would have HPE and Cisco competing pretty fiercely with very large R&D budgets investing in future technology,” he said. That is another thing the DOJ missed.” The bigger issue for the future of the networking business is the impact of artificial intelligence, said Kerravala. I think the DOJ’s thesis that this slows down innovation is backwards.” Will Townsend, vice president and principal analyst for networking and security practices for Moor Insights & Strategy, an Austin, Texas market research firm, said he sees the DOJ case as another example of the federal government “clearly not understanding the nuances” of technology.
