Light Reading
Juniper CEO is quoted in Europe as ready to spend on acquisitions, but Juniper claims it was a misquote

Juniper Spikes M&A Rumors

Light Reading
News Analysis
Light Reading
12/3/2004
50%
50%

Juniper Networks Inc. (Nasdaq: JNPR) CEO Scott Kriens was reported as saying he's got up to $1.5 billion to spend on new acquisitions.

Industry rumors persist that Juniper is looking for a way into the Ethernet switch market (see Juniper's Extreme Thoughts Are Back). So when Kriens reportedly told the Financial Times Deutschland Thursday that he's scoping out new M&A targets, a reaction was to be expected. Juniper claims Kriens was misquoted by the German press. A spokeswoman says his comments on potential M&A activity "were not reported accurately," and that while $1.5 billion is Juniper's published cash position, "it was not mentioned in conjunction with the company’s M&A policy during this interview."

She adds the company "always broadly monitors the marketplace, but we do not comment on acquisition policy beyond that."

On the report, Extreme Networks Inc.'s (Nasdaq: EXTR) stock edged up slightly yesterday, rising 10 cents, or 1.4 percent, to $7.06. That price values Extreme at $853 million. Other potential Ethernet switching targets include privately held Force10 Networks Inc. and Foundry Networks Inc. (Nasdaq: FDRY), though analysts believe they're less attractive propositions.

Foundry's stock dipped 14 cents, about 1 percent, to $13.50 on Thursday, valuing the firm at $1.85 billion.

But all of this could be much ado about nothing. Several sources tell Light Reading that in more intimate circles (and perhaps out of earshot of European journalists), Kriens has been poo-pooing the idea of buying Extreme, or any other Ethernet switch maker, even to the point of denigrating his competitors. The way Kriens sees it, buying an Ethernet switch company would simply plunge Juniper into the Ethernet port price-war, according to Scott Clavenna, Heavy Reading analyst. "He's said he doesn't want an Ethernet switch company because it's a commodity," says Clavenna.

But that hasn't stopped Juniper from buying other enterprise products, which may also be seeing pricing pressure. Juniper has already made one major leap into the enterprise sector this year with its $4 billion acquisition of security system vendor NetScreen (see Juniper Buys NetScreen). Since then, there's been concern about the revenue growth and margins in enterprise firewalls (see Juniper's NetScreen: Pricing Insecurity?).

Buying an Ethernet kit player would take Juniper even further into Cisco Systems Inc.'s (Nasdaq: CSCO) core territory, the enterprise networking market.

Juniper's share price closed up 42 cents, about 1.5 percent, at $28.70 on Thursday.

— Ray Le Maistre, International News Editor, and Scott Raynovich, US Editor, Light Reading


For the latest intelligence and analysis of next-generation telecom market opportunities, check out the coming Light Reading Live! event: Light Reading's Telecom Investment Conference, at the exclusive Plaza Hotel in New York City, on Wednesday, December 15, 2004.

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
DPD
50%
50%
DPD,
User Rank: Light Beer
12/5/2012 | 1:01:24 AM
re: Juniper Spikes M&A Rumors


http://yahoo.reuters.com/finan...
DPD
50%
50%
DPD,
User Rank: Light Beer
12/5/2012 | 1:01:24 AM
re: Juniper Spikes M&A Rumors
Kriens explicitly cited VOIP or Wireless companies.

JNPR will probably jump in to the whitehot VOIP sector with many greenfield applications in the design and deployment phases. These greenfield apps call for a lot of edge and core routers.
ragho
50%
50%
ragho,
User Rank: Light Beer
12/5/2012 | 1:01:20 AM
re: Juniper Spikes M&A Rumors

IMHO, the NetScreen acquisition hasn't quite given Juniper any edge in the broader market. It probably has brought common cost savings to SG&A, but not to sales growth, gross margin or EBIT.

Although Juniper wouldn't quite detail the revenue breakdown last quarter, Marcel Gani kind of acknowledged that the NetScreen revenue was about ~94m for the year, which represents flat growth on a YoY basis. Compare that to over 25% YoY growth that NetScreen had prior to the acquisition.

So, my opinion is that Juniper was too hasty to dilute share value with the 4B+ purchase of NetScreen. Unless I am missing something that gives them a strategic advantage in the long run.

And let's not forget that Juniper is already in a commodity market with the J-series. Enterprise access is huge market and it is a no brainer why someone wouldn't go after it. The Ethernet switching market is no different; it is a commodity, but for a solution-based approach (i.e. enterprise routing and switching), Juniper will have to bite switching sometime soon. At least something like stackable 10/100/1000 switching.
laserbrain2
50%
50%
laserbrain2,
User Rank: Light Beer
12/5/2012 | 1:01:18 AM
re: Juniper Spikes M&A Rumors
Marcel Gani kind of acknowledged that the NetScreen revenue was about ~94m for the year

That's $94m for the quarter. It is possible to attribute the weakish Netscreen year to significant churn in the sales organization. A lot of resumes on the street. It remains to be seen if they'll resume growth when it all settles down.

However, Netscreen indeed offers a diversification that JNPR needs. Telco/enterprise can be countercyclical in their spend. Technology-wise NSCN is positioned as well as any to grow to a $1bil line for JNPR. If it doesn't, it's a management problem.

Also, let's not forget that Netscreen sells a TON of boxes at <$1000. The 5's are commodity if I've ever seen one. They've built pretty good processes for staying price competitive.

So in my opinion, SK's just trying to talk the price tag down.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Dr. Dong Sun Talks About Carriers' Digital Transformation & Huawei’s Telco OS

1|29|15   |   6:28   |   (0) comments


Dr. Dong Sun, Chief Architect of Digital Transformation Solutions at Huawei, discusses how telecom operators can become digital ecosystem enablers and deliver optimal user experiences that are in real-time, on-demand, all-online, DIY and social (ROADS).
LRTV Huawei Video Resource Center
Huawei's Chief Network Architect Talks about Network Experience & Operators’ Strategies

1|29|15   |   3:39   |   (0) comments


In the digital age, network experience has become the primary productivity especially for telecom operators. In this video, Wenshuan Dang, Huawei’s Chief Network Architect, discusses how carriers can tackle the challenge of infrastructure complexity in order to enhance business agility and improve user experience.
LRTV Documentaries
The Rise of Virtual CPE

1|27|15   |   01:38   |   (3) comments


As NFV strategies evolve from tests and trials to production telco networks, expect to hear a lot about virtual CPE (customer premises equipment) rollouts during 2015.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Heavy Reading's Graham Finnie about the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control – and sign up for
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
Google Continues Gigabit Expansion
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/27/2015
Cablevision's New WiFi Try – Freewheeling Enough?
Mari Silbey, Independent Technology Editor, 1/26/2015
LightSpeed Looks to Plug the Gigabit Gap
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/23/2015
Overture Builds on NFV Foundation
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/27/2015
NTT DoCoMo Takes on Retail Broadband
Robert Clark, 1/29/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Weekly Executive Interview
Join us live for Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, Universal, Intel and Microsoft, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he has to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.