Light Reading

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
More Blogs from Column
What are the main steps that CSPs need to take in order to compete on the digital playing field?
The industry is at an inflection point, and one of the looming disruptors is 5G.
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Cable companies still dominate the scene at INTX, the event formerly known as The Cable Show.
What is the best way to support both layer 2 and layer 3 services at the edge of the network that incorporates virtual network functions?
Flash Poll
From The Founder
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
Between the CEOs
Affirmed Networks CEO: Digging Into NFV

5|28|15   |   40:26   |   (2) comments


Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
LRTV Documentaries
Cable Eyeing SDN for Headend, Home Uses

5|26|15   |   05:57   |   (1) comment


CableLabs is looking at virtualizing CMTS and CCAP devices in the headend, as well as in-home devices, says CableLabs' Karthik Sundaresan.
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Procera has gathered facts, stats and customer experience feedback from a survey of 540 users from across the globe.
Hot Topics
Charter Seals Deals for TWC, Bright House
Mari Silbey, Senior Editor, Cable/Video, 5/26/2015
Eurobites: Alcatel-Lucent Trials 400G in Czech Republic
Paul Rainford, Assistant Editor, Europe, 5/26/2015
Will Carriers Follow Facebook's Networking Lead?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/28/2015
Charter Plans Business Services, Wireless Push
Alan Breznick, Cable/Video Practice Leader, 5/27/2015
Facebook Reinvents Data Center Networking
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/26/2015
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
On May 29th 1 PM ET, Steve Saunders, founder and CEO of Light Reading, will be drilling into the "pains and gains" of NFV with Saar Gillai, SVP & GM for NFV at Hewlett-Packard Co. (NYSE: HPQ) (HP). He has defined a four-step NFV model describing a sequence of technology innovation. It's a must-read doc for any network architect looking to get to grips with their NFV migration strategy. Join us for the interview, and the chance to ask Saar your NFV questions directly!
Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
Cats with Phones