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
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Light Reedy
Numbers Are In: LR's 2014 Salary Survey

7|24|14   |   1:25   |   (7) comments


Our fourth annual Salary Survey paints a picture of who's hiring, firing, earning, and yearning for a change in the telecom industry.
LRTV Custom TV
Driving the Network Transformation

7|23|14   |   4:29   |   (0) comments


Intel's Sandra Rivera discusses network transformation and how Intel technologies, programs, and standards body efforts have helped the industry migration to SDN and NFV.
LRTV Custom TV
Distributed NFV-Based Business Services by RAD

7|18|14   |   5:38   |   (0) comments


With the ETSI-approved Distributed NFV PoC running in the background, RAD's CEO, Dror Bin, talks about why D-NFV makes compelling sense for service providers, and about the dollars and cents RAD is putting behind D-NFV.
LRTV Custom TV
MRV Accelerating Packet Optical Convergence

7|15|14   |   6:06   |   (0) comments


Giving you network insight to make your network smarter.
LRTV Custom TV
NFV-Enabled Ethernet for Generating New Revenues

7|15|14   |   5:49   |   (0) comments


Cyan's Planet Orchestrate allows service providers and their end-customers to activate software-based capabilities such as firewalls and encryption on top of existing Ethernet services in just minutes.
LRTV Custom TV
Symkloud NVF-Ready Video Transcoding, Big Data

7|9|14   |   3:41   |   (0) comments


Kontron and ISV partner Vantrix demonstrate high-performance video transcoding and data analytic solutions on same 2U standard platform that is ready for SDN and NFV deployments made by mobile, cable and cloud operators.
LRTV Huawei Video Resource Center
The Evolving Role of Hybrid Video for Competitive Success

7|4|14   |   4:09   |   (0) comments


At Huawei's Global Analysts Summit in Shenzhen, China, Steven C. Hawley from TV Strategies speaks to us about the evolving role of hybrid video for competitive success.
LRTV Huawei Video Resource Center
How CSPs Leverage Big Data in the Digital Economy

7|4|14   |   4:48   |   (2) comments


Justin van der Lande from Analysys Mason shares with us his views on how telecom operators can leverage customer asset monetization with big data. His discusses the current status of big data applications and the challenges and opportunities for telecom operators in the digital economy era.
LRTV Huawei Video Resource Center
Accelerator for Digital Business Future Oriented BSS

7|4|14   |   3:08   |   (0) comments


Mobile and internet are becoming intertwined; IT and CT are integrating; and leading CSPs have begun to transform to information service and entertainment providers. How should the BSS system evolve to enable this transformation? Karl Whitelock, an analyst at Frost & Sullivan, shares his views.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Packet Design asks network professionals how they handle the cloud, SDN, and network management.
Today's Cartoon
Vacation Special Caption Competition Click Here
Latest Comment
Hot Topics
The Municipal Menace?
Jason Meyers, Senior Editor, Utility Communications/IoT, 7/22/2014
Cisco Puts a Fog Over IoT
Sarah Reedy, Senior Editor, 7/23/2014
Apple Earnings: Strong iPhone Sales, iPad Sales Slump, $7.8B Profit
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/22/2014
Salary Survey Report 2014
Sarah Reedy, Senior Editor, 7/23/2014
Like Us on Facebook
Twitter Feed