Cisco, Juniper Networks, and Extreme Networks are riding atop a public cloud-managed campus switch and wireless LAN (WLAN) market that is forecast to hit double-digit growth over the next three years, heading toward total market revenues in excess of $12 billion in 2029, though market dynamics could alter that competitive landscape.

The latest market numbers come from Dell’Oro Group, which reported strong spending momentum from enterprises. Siân Morgan, enterprise WLAN research director at Dell’Oro Group, noted that “despite the challenging market, 2024 is the first year we’ve seen signs that enterprises are willing to increase their spending to get more advanced public cloud-managed features.”

That should be good news for those market leaders that are each working through different operational dynamics.

Cisco, for instance, is working through a corporate restructuring that is de-emphasizing its traditional networking base in favor of greater growth opportunities in the artificial intelligence (AI), security, and cloud arenas. These moves have borne out in the market where Cisco has reported strong growth from those new focus areas, but some customers have ripped out their legacy Cisco WLAN and campus networking deployments in favor of upstarts.

Despite that turmoil, Cisco’s leading market position remains a significant talking point. This includes an impact on Juniper’s pending acquisition by Hewlett Packard Enterprise (HPE).

The Department of Justice (DOJ) filed a lawsuit against the proposed $14 billion deal, citing those two vendor’s current WLAN market strengths. That lawsuit claims a combination of those two vendors together with Cisco’s ongoing market dominance will concentrate too much WLAN gravity around potentially two outsized players.

Some have questioned this reasoning, noting that a combined HPE and Juniper will only be a better rival against Cisco in this space.

Both HPE and Juniper have continued to update their respective WLAN platforms under this legal cloud, with both increasing their focus on AI integration to drive growth. However, market rivals have noted customer concerns.

“I think for sure that’s created just a degree of uncertainty and a question of, hey, should I consider if I was previously a vendor or a customer of either of those, now is the time to kind of open up and look at other opportunities,” Cisco CFO Scott Herren said during an investor conference late last year. “And we’ve seen our wireless business, our orders greater than $1 million grew more than 20 percent in the fourth quarter.”

Juniper’s most recent results did highlight potential financial manifestation of those concerns. While the vendor’s results significantly improved year over year, they were down sequentially.

Juniper CEO Rami Rahim told SDxCentral following its previous earnings release that despite the challenge the vendor remained focused on operations.

“We haven't skipped a beat at Juniper as we go through this process, you can see it in our results,” Rahim said. “We're performing exceptionally well as a standalone company, but I am a firm believer that we will be an even stronger company when this deal is cleared and we become part of the HPE family."

Extreme stirring the pot

Extreme Network CEO Ed Meyercord has added fuel to that controversy fire, telling SDxCentral that the vendor is hearing more discontent across the industry in regard to messaging from both HPE and Juniper as it applies to the pending deal and what might come after a potential closing.

“When you combine businesses, you’ve got to make decisions on the portfolio, the roadmap, and technology,” Meyercord said. “You can't carry forward all the technology, so you have to make calls there. You have different cultures that have to come together, and who knows how that works. You've got more specifically channel programs and different programs, so they have to be modified. You can't keep the same programs. And then there's pecking order changes and focuses, and so if that deal happens there's going to be a lot of disruption. And there has been some amount of disruption just in anticipation of what's going to happen and the uncertainty around it.”

Meyercord’s boasting was backed by the vendor posting robust results for its most recent fiscal quarter. The vendor generated a nearly 74-percent increase in net income compared to the previous year, with net income turning around from a $64.4 million loss to a $3.5 million gain.

Meyercord also noted during the vendor’s earnings call that Juniper is reacting to the market uncertainty.

“We've seen Juniper get a little more aggressive in pricing to win business,” Meyercord said. “They're somewhat in the same situation as HPE because they're stagnant. They can't provide real guidance to the channel or customers as to the future of the product roadmap, the technology, the solutions. They just they don't know. So that's helpful to us.”

Meyercord took a more modest dig at Cisco, noting that Extreme was seeing network opportunities from Cisco’s revamped focus away from its legacy core and onto its cybersecurity, AI systems, and software-as-a-service (SaaS) offerings.

“Cisco has actually been pretty strong and competitive in the marketplace, hanging on to their market share,” Meyercord said during that vendor’s latest earnings call. “I don't really have a lot to report on that front, except for the fact that with their focus as it relates to Splunk and driving SaaS revenue, observability, security, they seem to be moving away from or less focused on enterprise networking, and there are solutions there. This is what we hear from customers and partners. They remain the most complicated, unintegrated, and expensive solution in the marketplace. And so, the chorus of dissatisfaction from Cisco continues to grow. And the larger deals that we're talking about, in most cases, these are competitive wins from Cisco.”

HPE surging, but to what end

While HPE is working through its legal morass, Dell’Oro Group did note that the vendor’s cloud-managed platform “has grown faster than the market, and the company’s pace of development seems unaffected by the pending lawsuit aiming to prevent HPE’s acquisition of Juniper.”

That pace could be good news for HPE CEO Antonio Neri, who is reported to be under pressure due to the pending Juniper issue and HPE’s broader operational malaise.

Bloomberg recently reported that Elliott Investment Management had acquired more than $1.5 billion in HPE with an obvious intent to boost the value of that investment. Semafor added that Elliott Investment sent a letter to HPE’s board asking for Neri’s removal, with the board expected to meet on that request.

HPE’s most recent earnings release did not help Neri’s cause. While the vendor reported a “near record” 17-percent increase in overall revenues compared to the same quarter last year and that it met its growth expectations thanks to strong growth in its server, storage, hybrid cloud, and campus switching businesses, Neri also admitted “we could have executed better.”

Neri noted that HPE’s “traditional server pricing did not adequately account for the evaluation of our inventory, which resulted in incremental server margin pressure.” That pressure was compounded by “higher discounts due to aggressive price and competition in the market.”

Unfortunately for Neri, with a growing financial pot of WLAN opportunity, aggressive pricing and competition challenges are unlikely to diminish.