Hewlett Packard Enterprise has shifted its strategy to position networking as its primary growth engine. The company projects its combined networking revenue to increase from $9.3 billion in fiscal 2024 to approximately $11.3 billion by fiscal 2026, with operating profits expected to rise from $1.6 billion to $2.5 billion.
HPE has revised its fiscal 2027 revenue growth forecast for networking to the high-teens to low-20% range. The company aims for high-teens compound annual growth through fiscal 2029. Annual cost synergies from the Juniper Networks acquisition are now targeted at $800 million by the end of fiscal 2028, up from the initial goal of $450 million.
The data center segment is identified as the fastest-growing area, with a target CAGR of 50% through fiscal 2029. HPE secured a $1.2 billion order from Vultr for its Helios scale-up racks, which utilize Juniper Ethernet switch trays to connect AMD Instinct MI455X GPUs. Orders for these networking trays have already surpassed $200 million.
HPE is integrating its partner ecosystem, transitioning 60,000 partners to a single program on November 1. While the company faces supply chain limitations, it reported that third-quarter orders grew 3.5 times faster than revenue. Management noted that future performance depends on securing components and executing the transition of the sales and partner channels.
