HPE to acquire Juniper Networks to accelerate AI-driven innovation

Hewlett Packard Enterprise (HPE) influencer group first contacted me in the mid-2010s through the Aruba networking group. I was the independent industrial IoT writer at the time. The scope broadened for a time, then they closed the influencer group a couple of years ago. But I’ve maintained a bit of a connection to HPE networking, as well as its software and high-end hardware groups.

I’m not an analyst of this part of the market, but I’d have to say this is not a surprising acquisition. HPE has been pretty aggressive under CEO Antonio Neri. They usually do pretty well at integrating acquisitions. This acquisition of Juniper Networks should be a boost.

From the news release in brief:

  • Highly complementary combination enhances secure, unified, cloud and AI-native networking to drive innovation from edge to cloud to exascale
  • Accelerates long-term revenue growth and expands gross and operating margin; Expected to be accretive to non-GAAP EPS and free cash flow in year 1, post close
  • Advances HPE’s portfolio mix shift toward higher-growth solutions and strengthens high-margin networking business 

Hewlett Packard Enterprise and Juniper Networks, a leader in AI-native networks, announced January 9 that the companies have entered a definitive agreement under which HPE will acquire Juniper in an all-cash transaction for $40.00 per share, representing an equity value of approximately $14 billion.

The combination of HPE and Juniper advances HPE’s portfolio mix shift toward higher-growth solutions and strengthens its high-margin networking business, accelerating HPE’s sustainable profitable growth strategy. The transaction is expected to be accretive to non-GAAP EPS and free cash flow in the first year post close.

The acquisition is expected to double HPE’s networking business, creating a new networking leader with a comprehensive portfolio that presents customers and partners with a compelling new choice to drive business value.

Combining HPE and Juniper’s complementary portfolios supercharges HPE’s edge-to-cloud strategy with an ability to lead in an AI-native environment based on a foundational cloud-native architecture. 

Upon completion of the transaction, Juniper CEO Rami Rahim will lead the combined HPE networking business, reporting to HPE President and CEO Antonio Neri.

Digital Twin and Simulation Technology Power Business and Decision Strategies

I had to wade through a lot of marketing to get to the core of this news from a company that I don’t know. The company is FICO (Fair Isaac Corporation). Founded in 1956 (almost as old as me), it’s a business analytics, data science, predictive analytics company. Of interest to us is work in supply chain resiliency.

The company announced more than 20 enhancements to its Platform

The updates include robust innovations in digital simulations. One of the most significant updates is within the Digital Twin and Simulation capability, which enables users of FICO Platform to create an enterprise digital twin of their organization and unlock the power of business simulations. This allows businesses to experiment across many dimensions, not previously possible, to find optimal business outcomes. Updates include faster deployment for increased efficiency, thorough validation of changes to decision strategies, and better understanding of the impact on business KPIs such as profitability metrics.

Among the 20+ enhancements, key improvements to FICO Platform include:

  • Data Connection and Ingestion – Our latest data-focused enhancements aim to break down organizational siloes and put data into motion with improved data pipelines, a high-performance hotlist service, enriched data feature libraries, and an easy-to-use database service.
  • Applied Analytics & ML and Enterprise Optimization – These updates are focused on enhancing clients’ ability to build world-class predictive credit analytics and ML models, pull in third party models, and apply mathematical optimization to new domains. This release includes improvements to our proprietary segmented scorecards, multi-target scorecards, reject inference, Python APIs, ML execution and optimization solver performance enhancements, and the launch of a new global optimization solver.
  • Intelligent Decisions and Business Composability – This release supports lifecycle management for fine-grained control to easily manage and promote projects from design, staging, and production for even the most complex enterprise environments with better isolation to compress and safely scale change cycles. Additional enhancements provide deeper native integration with other FICO capabilities for applied analytics & ML and simulation so teams can work efficiently across the entire decision intelligence value chain.
  • Digital Twins and Simulation – In this space we dive deeper into the development of a digital twin for businesses to enable experimentation within our Simulation Capability. Our latest release makes it easy for business staff to rapidly construct new business scenarios, pressure test possible changes, validate strategies, and simulate the effects on business KPIs to easily measure operational impact and move fast with confidence.

IT Infrastructure Integration Company Offers AI Implementation Tips

Indiana-based Matrix Integration has been asserting itself as the AI integration partner of choice for your IT needs. I get a lot of these sort of releases. This one seems to offer a few quality tips.

“We have been leveraging AI tools in our strategic partner software suites for clients for several years. Customers turn to us for support in fine-tuning the automation capabilities within these suites to make critical decisions in their infrastructure,” said Tim Pritchett, engineer operations manager at Matrix Integration. “As time and resources continue to crunch in maintaining your IT systems and security, AI tools can be leveraged to protect your data and get the most benefit out of what you already own.”

Because AI becomes a more commonly built-in component of many managed software suites, here are the top three issues business should consider as AI becomes more universal:

  • Data quality matters. Whether businesses are using AI to generate content (such as drafting communications with customers) or analyze production efficiencies, high-quality data is necessary to train AI models. Already, biased inputs in large-language models like ChatGPT have led to biased outputs that could damage a company’s reputation on a great scale. In the case of data analysis, inaccurate or damaged data fed to an AI model will lead to unusable outputs.
  • Data security isn’t guaranteed.  Companies will need to consider how they will secure their own data, as well as data supplied by clients. This requires asking questions and developing transparency and trust with cloud services providers as well as AI vendors. For example, many businesses provide customer-facing chatbots run by AI. For example, imagine that customers type sensitive or personal data (e.g., bank account numbers) into a chatbot. Or, as another example, a business supplies internal data to AI models to generate proprietary operations solutions. Is that data safe once it gets uploaded into a cloud-based AI application? Can it be used by other customers of that AI vendor?
  • Humans are key for AI to work properly. Right now, much of AI seems to be a “black box” – most people understand the inputs and outputs but are unfamiliar with how learning algorithms work and how they handle data. For example, Microsoft 365 security tools through Defender, Sentinel, or the Purview compliance portal all do an excellent job of leveraging AI to make decisions and inform IT administrators on the best decisions to make in a scenario. However, experienced security professionals can still play a key role by fine-tuning these notifications and building automation for these tools.

Lack of Roadmap Biggest Hurdle for Manufacturers Looking for Digital Transformation

Once upon a time surveys were the purview of analyst firms and media. None were mathematically rigorous. Most do show trends and yield ideas for thought.

Digital transformation is top of mind for companies who develop and market software solutions but maybe not so much for customers. This survey is from iBase-t. I knew them as an MES supplier, but now the are the company “that simplifies how complex products are built and maintained.” In other words, MES. That’s OK. My background in that application goes back decades.

This original survey of more than 100 discrete manufacturing executives in the U.S. found that a lack of a clearly defined roadmap is the biggest challenge for manufacturers looking to digitally transform their operations.

None of this surprises me. Many studies have found similar statistics. Upper management in manufacturing organizations “know” these problems. They don’t seem to know how to go about implementing solutions. Or, they don’t want to spend the money!

In brief, their study revealed:

  • 60% of manufacturers don’t have a clear understanding of the model-based enterprise
  • 67% of manufacturers say that less than half their operations are digital

A full 60% of respondents said they did not have a clear understanding of the model-based enterprise (MBE), which employs CAD systems, Product Lifecycle Management (PLM) systems and Manufacturing Execution Systems (MES) to help manufacturers fully digitize their operations.

Respondents confirmed that although paperless manufacturing and digital transformation are very important priorities, more than two-thirds (67%) of manufacturers reported that less than half of their operations are digital.

The survey found that more than half (54.5%) of respondents lack the interoperability across operations to adopt an MBE strategy. An additional 55% said that their manufacturing systems are not mature enough to support MBE.

Other Key findings:

  • According to the survey, 62% of total respondents said that they believe paperless manufacturing is “very important” to their organization.
  • The top four goals for manufacturers heading into 2024 are efficiency (66%), on-time delivery (66%), done-right first time (49%) and profitability (47%). An MBE strategy empowers manufacturers to reach all of these goals.

Executive Insights into Manufacturing Cybersecurity with Rockwell Automation and Dragos

Dragos invited me to sit in a webinar on Oct. 6 focusing on manufacturing cybersecurity featuring Robert M. Lee, CEO & Co-founder of Dragos, and Blake Moret, Chairman & CEO of Rockwell Automation. This is now available on demand.

They offered executive insight—both their own and executives of client companies—into the problems involving cybersecurity and what many companies are doing in defense. They offered some practical advice. 

They have found that CEOs and Boards realize the gravity of the situation and the necessity for quick action. Surprisingly many times the problem lies in the CISO organization. They get caught up in pilot purgatory without rolling out solutions in a timely manner. 

I wonder in your organization where the bottleneck to getting necessary systems implemented resides? I hope not with you. And if identified, what all can you do to pop that clog?

Back to the webinar, the  presenters pointed to such areas for improvement as limited OT network visibility, security perimeter challenges, unmanaged external connections, and the importance of separate IT/OT cybersecurity approaches.

In response, Rockwell Automation has offered guidance to customers about the need to prioritize cybersecurity. Moret, “Cybersecurity is the first thing on the list of things to get done, and the last thing on the list.”

I recently reported on a Rockwell paper detailing recent research on cybersecurity.

Lee discussed the Five Critical Controls for OT Cybersecurity:

  • Response Plan
  • Defensible Architecture
  • Visibility
  • Secure Remote Access
  • Key Vulnerability Management

The key takeaway—make cybersecurity a priority either strengthening your existing process or get busy building a secure process.

New Research Finds Cyberattacks Against Critical Infrastructure on the Rise

  • State-affiliated Groups Responsible for nearly 60%
  • 60% of incidents result in operational disruption, driving the need for proactive OT defenses and incident response

The topics of this time are Cybersecurity, Sustainability, and Workforce with the impact of AI playing on all three. This news from Rockwell Automation focuses on Cybersecurity. It has released a report on an in-depth study of the topic by Cyentia Institute. The report is comprehensive deserving of a thorough read.

Rockwell Automation announced the findings of its report “Anatomy of 100+ Cybersecurity Incidents in Industrial Operations.” The global study conducted by Cyentia Institute analyzed 122 cybersecurity events that included a direct compromise of operational technology (OT) and/or industrial control system (ICS) operations, collecting and reviewing nearly 100 data points for each incident.

Don’t think you are immune from global politics. Unfortunately.

The first edition of the report finds nearly 60% of cyberattacks against the industrial sector are led by state-affiliated actors and often unintentionally enabled by internal personnel (about 33% of the time). This corroborates other industry research showing OT/ICS security incidents are increasing in volume and frequency, and are targeting critical infrastructure, such as energy producers.

“Energy, critical manufacturing, water treatment and nuclear facilities are among the types of critical infrastructure industries under attack in the majority of reported incidents,” said Mark Cristiano, commercial director of Global Cybersecurity Services at Rockwell Automation. “Anticipating that stricter regulations and standards for reporting cybersecurity attacks will become commonplace, the market can expect to gain invaluable insights regarding the nature and severity of attacks and the defenses necessary to prevent them in the future.”

  • OT/ICS cybersecurity incidents in the last three years have already exceeded the total number reported between 1991-2000. 
  • Threat actors are most intensely focused on the energy sector (39% of attacks) – over three times more than the next most frequently attacked verticals, critical manufacturing (11%) and transportation (10%). 
  • Phishing remains the most popular attack technique (34%), underscoring the importance of cybersecurity tactics such as segmentation, air gapping, Zero Trust and security awareness training to mitigate risks. 
  • In more than half of OT/ICS incidents, Supervisory Control and Data Acquisition (SCADA) systems are targeted (53%), with Programmable Logic Controllers (PLCs) as the next-most-common target (22%).
  • More than 80% of threat actors come from outside organizations, yet insiders play an unintentional role in opening the door for threat actors in approximately one-third of incidents.  

In the OT/ICS incidents studied, 60% resulted in operational disruption and 40% resulted in unauthorized access or data exposure. However, the damage of cyberattacks extends beyond the impacted enterprise, as broader supply chains were also impacted 65% of the time.

The research indicates strengthening the security of IT systems is crucial to combatting cyberattacks on critical infrastructure and manufacturing facilities. More than 80% of the OT/ICS incidents analyzed started with an IT system compromise, attributed to increasing interconnectivity across IT and OT systems and applications. The IT network enables communication between OT networks and the outside world and acts as an entryway for OT threat actors. Deploying proper network architecture is critical to strengthening an organization’s cybersecurity defenses. It is no longer enough to simply implement a firewall between IT and OT environments. Because networks and devices are connected daily into OT/ICS environments, this exposes equipment in most industrial environments to sophisticated adversaries. Having a strong, modern OT/ICS security program must be a part of every industrial organization’s responsibility to maintain safe, secure operations and availability.

Methodology 

For this report, Rockwell Automation commissioned the Cyentia Institute to analyze data from 122 cybersecurity events across the globe, which occurred from 1982-2022. The Cyentia Institute’s team collected and analyzed nearly 100 data points surrounding individual incidents involving the direct compromise or disruption of OT/ICS systems. The resulting report was developed to share instructive insights about actual OT/ICS cybersecurity attack activity.

The Cyentia Institute is a research and data science firm dedicated to the mission of advancing knowledge in the cybersecurity industry. We accomplish this by partnering with a variety of organizations to perform comprehensive data analysis and publish high-quality, data-driven research. 

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