& cplSiteName &

Valley Wonk: Juniper's Shopping List

Column
Column
Column
2/24/2005
50%
50%

Nothing beats spending somebody else's money, and in that spirit, the industry has been happy to do Juniper Networks Inc.'s (Nasdaq: JNPR) shopping this past year. Every month or so, a new rumor makes the rounds about what the company will acquire next (see Juniper's Slow Shopping Trip ).

One Wall Street visitor at Juniper's recent analyst day had a good solution. "You know what you should do?" the analyst told Juniper execs. "Just buy something, just to shut everybody up."

It's not a bad plan. Clandestinely set up two guys in a garage, take their picture next to a blinky-lights box that says "Layer 4-7 Ethernet Wireless Security" on the side, and announce the acquisition of AirEther4-7 Inc. – for an undisclosed sum, natch. Poof! Every merger rumor comes true at once.

CEO Scott Kriens went for the humor tactic instead, opening the analyst meeting with a joke about a hostile takeover of Oracle (see The Price Is Right for PeopleSoft if you don't get it). But that was it, and it left analysts to keep obsessing about the acquisition thing.

One source claims Juniper has three acquisitions on its wish list: something in Ethernet, a technology to "fill a hole" (presumably wireless), and a "mid-market" company. Our guess is that the last one is a place-holder for the budget.

Luckily, the most plausible merger rumors fall into three categories. So, let's run with the idea: Where should Juniper's merger scouts be looking, if they aren't already?

Ethernet switch
Yes, Kriens hates the idea (see Juniper Spikes M&A Rumors). But it isn't going away, because many believe Juniper can't succeed in the enterprise without matching Cisco Systems Inc.'s (Nasdaq: CSCO) breadth of product. That means Juniper needs an Ethernet switch to sell alongside its routers.

The problem is the lack of easy – or cheap – candidates. Force10 Networks Inc. is the only private company that seems likely, and it's going to be too expensive, mostly because the VCs, who have pumped hundreds of millions into it, want to see either top-dollar or an IPO(see Force10 Networks). That leaves Extreme Networks Inc. (Nasdaq: EXTR) and Foundry Networks Inc. (Nasdaq: FDRY), both public and expensive – market caps of $770 million and $1.4 billion, respectively. Sources have said Juniper pinged Foundry on the idea last year but got rebuffed by Foundry CEO Bobby Johnson.

Juniper probably does want a hand in this market but doesn't like any aspect of it. To defray the high acquisition costs, maybe Juniper should just build its own stuff. A chip acquisition would be cheaper than an Extreme buy. Or, Juniper could just use off-the-shelf chips as the basis for Ethernet switching cards.

But this still doesn't solve the margins problem. Given the lack of easy options, Juniper might be best off stepping into a reseller role, offering Ethernet switches through a partner.

Wireless
Wasn't this a hot topic a month ago? Once Cisco grabbed Airespace Inc., everyone expected Juniper to dive for a wireless LAN switch company. And in fact, Juniper reportedly put in a bid for Aruba Wireless Networks and talked to the less expensive Trapeze Networks Inc. (see Sources: Juniper Eyeing Trapeze).

Merger talk seems to have died down here. The companies here are cheaper than the Ethernet choices, but some might be seeking better options while WLAN is still a hot topic. Aruba, in particular, might have its eye on going public.

And again, margins might be a factor. Wireless LAN switching is a separate appliance for now, but it's going to become just another feature inside a switch or router. That means the WLAN switch's future is one of cost-cutting and integration, with chips and software already emerging to help things along (see Broadcom Integrates WLAN Switch and NextHop Reveals WLAN Plan).

Wireless might end up being another reseller category for Juniper. That would give the company a WLAN story for the moment while developing its own WLAN switch-on-a-card for later.

Layers 4-7 processing
Higher-layer processing presents better margins than Ethernet or WLAN, and plenty of startups are working on this technology, presenting lots of options. It's no wonder this has become the latest pet theory.

The logic goes deeper, too. This technology would make a nice extension to NetScreen and to the Infranet Initiative, a Juniper-supported effort to drive standards for a more intelligent public network (see Juniper Buys NetScreen and Juniper's Infranet Takes Baby Steps). And Kriens keeps talking big about traffic processing, saying it's central to Juniper's role in the network.

Juniper officials point out that they already have this stuff. But Cisco is amassing some new tricks with technology acquired from the likes of P-Cube (see Cisco Plucks P-Cube for $200M and Cisco Rules L4-L7 Switch Market). Juniper ought to counter.

F5 Networks Inc. (Nasdaq: FFIV) gets held up as the example here, but plenty of others could be had for cheaper, including NetScaler Inc., Peribit Networks Inc., and Radware Ltd. (Nasdaq: RDWR). Not to bias the judges, but NetScaler happens to be one of Light Reading's top picks to get acquired or go public – and it occupies that coveted No. 10 spot on our Top Ten Private Companies list.

Given the options, it doesn't look as if Juniper will go through with three acquisitions -- not from this pool, anyway. A Layers 4-7 buy looks like a slam dunk, but the company has to make some tough decisions in Ethernet and wireless.

In the end, it seems clear that Juniper is set on trying to create a new kind of enterprise company, one that delivers a higher-performance network.

The other option? If Juniper holds off long enough, it could just be another enterprise vendor with some gaping holes in its portfolio.

— Craig Matsumoto, Senior Editor, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
light-headed
50%
50%
light-headed,
User Rank: Light Beer
12/5/2012 | 3:25:34 AM
re: Valley Wonk: Juniper's Shopping List
ME. I am available for 30-50M, make a mean cup of chai and have all my original teeth. If they were to acquire me I could hang around the Matilda Campus and be clever. I promise to say things like:

"Gee Pradeep, you are A GENIUS"

"Yes, Yakov, I think that home appliances should be run off of BGP4 with new extensions"

"Scott, you really don't need a switch company"

"Cisco is a really bad company and they are mean people too!"

"I want an Infranet in my home network."

and more... think of it juniper, this could put you over the top. Any juniper representatives can contact me at CoolDude@BestAcquistion.com
ironccie
50%
50%
ironccie,
User Rank: Light Beer
12/5/2012 | 3:25:21 AM
re: Valley Wonk: Juniper's Shopping List
Sounds like Foundry would solve all of Juniper's problems? If only Foundry had something that could do MPLS better than the T640 and a better IPS/SSL VPN solution than Juniper, it sounds like Foundry would be better than Juniper?

IronCCIE
Educational Resources
sponsor supplied content
Educational Resources Archive
More Blogs from Column
Spectrum sharing is becoming a bigger issue as the 5G radio specification evolves.
Addressing current and future app demands while laying the foundation for mobile's next big network transition.
Broadcasters can no longer rely on pulling audiences to the TV screen; they need to pursue their audiences on digital, wherever they are.
Why advanced data analytics are the future for streaming video services.
5G could ride the traditional wireless hype cycle, or – quite possibly – break the chain, suggests Nokia's North American CTO.
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
No Stopping Cable's Ethernet Gains

12|9|16   |     |   (0) comments


Vertical Systems' Erin Dunne explains why US cable operators, which now command a record-high 26% of the Ethernet market, will keep boosting their share.
LRTV Interviews
Fixing IoT Security Is an Ecosystem Challenge

12|9|16   |   05:34   |   (1) comment


Level 3 Communications' Chief Security Officer Dale Drew says service providers, manufacturers and even consumers must combine to halt massive DDoS attacks using IoT devices in botnets. The solution he has in mind includes reputation-based routing by the service provider but also more secure endpoint devices and greater consumer awareness.
LRTV Interviews
Cox Clears $2B in Business Revenue

12|8|16   |     |   (0) comments


Cox's Jeff Breaux discusses how the third-largest US MSO will reach the $2 billion revenue mark this year and plans to hit $3 billion by 2021
LRTV Interviews
Can Cable Climb Upmarket?

12|7|16   |     |   (0) comments


Carol Wilson and Alan Breznick assess cable's prospects for winning more enterprises in a landscape rocked by corporate M&A activity.
Women in Comms Introduction Videos
TalkTalk Exec: Find Your North Star at Work

12|7|16   |   3:38   |   (1) comment


Women need to find their purpose, a professional North Star, and create a personal board for themselves, according to Alex Tempest, director of partners at TalkTalk Business.
LRTV Interviews
Verizon: Beware Unknown Unknowns

12|7|16   |   04:58   |   (0) comments


Chris Novak, director of the Verizon Enterprise Solutions Risk Team, explains that enterprises who don't conduct a thorough audit of their assets often leave some things unprotected because they don't know they exist. Many times these unprotected assets are part of corporate M&A activity but left unshielded they can become a hacker's playground, he tells Light ...
LRTV Interviews
ETSI's CTO Talks NFV, 5G & NGP

12|5|16   |   09:45   |   (0) comments


Adrian Scrase, CTO at standards body ETSI, talks about the various initiatives and specifications developments related to NFV, 5G and NGP (next-generation protocols) that will underpin next-gen networks.
Women in Comms Introduction Videos
Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

11|30|16   |   4:10   |   (2) comments


Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
LRTV Custom TV
We Can Make the World More Sustainable

11|29|16   |     |   (0) comments


GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
Finding a New Way to Engage Customers & Drive Revenue

11|29|16   |     |   (0) comments


Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
LRTV Custom TV
Do You Really Need Gigabit Infrastructure?

11|29|16   |     |   (0) comments


Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
BTís Openreach Strategy & Its Updates in 2016

11|29|16   |     |   (0) comments


A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
Upcoming Live Events
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Cable Nodes Becoming a Choke Point
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 12/5/2016
Consolidated Snaps Up Fairpoint for $1.5B
Iain Morris, News Editor, 12/5/2016
Small Arctic ISP Caches Netflix in New Way
Mari Silbey, Senior Editor, Cable/Video, 12/7/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
A Mobile Safari Click Here
Literally.
Latest Comment
Live Digital Audio

Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.