& 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
More Blogs from Column
Status and next steps on spectrum policy for Gigabit LTE and 5G in the US and beyond.
Will social media platforms be the next big disruptor of the pay-TV industry? Could be, but pay-TV providers have ways to respond to this and other threats.
Gigabit LTE is a must-have, not a gimmick, for operators around the globe.
What organizations can expect when becoming GDPR compliant and how they can effectively navigate it.
Is there an upside to Moore's Law slowing down? Actually, there are many.
From The Founder
NFV's promises of automation and virtualization are intriguing, but what really excites service providers is the massive amount of money they could save.
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.
Women in Comms Introduction Videos
AT&T's Tech President Preps Workforce for the Future

7|26|17   |   5:47   |   (5) comments


AT&T is focused on the software-defined network of the future and is reskilling its workforce to get ready too, according to AT&T's President of Technology Development Melissa Arnoldi.
Women in Comms Introduction Videos
Cisco: Mentoring Critical to Attract & Retain Women

7|19|17   |   6:40   |   (1) comment


Liz Centoni, senior vice president and general manager of Cisco's Computing System Product Group, shares why mentoring in all its forms is important for women and what Cisco is doing that's made a difference for women in tech.
LRTV Custom TV
Gigabit LTE With Snapdragon 835

7|12|17   |     |   (1) comment


At an event in Wembley stadium, EE used its live network to demonstrate gigabit LTE using a Sony Xperia XZ Premium smartphone with a Qualcomm Snapdragon 835 chip.
LRTV Custom TV
Implementing Machine Intelligence With Guavus

7|12|17   |     |   (0) comments


Guavus unites big data and machine intelligence, enabling many of the the largest service providers in the world to save money and drive measureable revenue. Learn how applying Machine Intelligence substantially reduces operational costs and in many cases can eliminate subscriber impact, meaning a better subscriber experience and higher NPS.
LRTV Custom TV
Unlocking Customer Experience Insights With Machine Intelligence

7|12|17   |     |   (0) comments


When used to analyze operational data and to drive operational decisions, machine intelligence reduces the number of tasks which require human intervention. Guavus invested in Machine Intelligence early. Learn about the difference between Machine Learning and Machine Intelligence.
Women in Comms Introduction Videos
Verizon VP Talks Network, Career Planning

7|12|17   |   4:49   |   (0) comments


Heidi Hemmer, vice president of Technology, Strategy & Planning at Verizon, shares how bold bets and the future of tech define her career.
Telecom Innovators Video Showcase
Masergy's NFV Journey

7|11|17   |     |   (0) comments


Ray Watson, vice president of global technology at Masergy, discusses the advantages and challenges in entering the still-maturing NFV market for the past three years.
Telecom Innovators Video Showcase
Mavenir on RCS Cloud Platform & Multi-ID

7|10|17   |     |   (0) comments


Guillaume Le Mener, head of marketing and corporate development at Mavenir, discussed RCS and the recent launch of Multi-ID, which supports T-Mobile's DIGITS, the revolutionary new technology that breaks down the limitation of one number per phone and one phone per number.
LRTV Custom TV
ADTRAN Executive Outlines Trends in Next-Generation 10-Gigabit Cable Networks

7|10|17   |     |   (0) comments


Hossam Salib, VP of Cable and Wireless Strategy at ADTRAN, outlines key trends as MSOs begin to deploy next-generation Gigabit and 10-Gigabit cable networks. In the interview, Hossam outlines the advantages of a Fiber Deep architecture, FTTH options including EPON and RFoG, and the importance of SDN and NFV in building next-generation high-bandwidth cable networks.
LRTV Interviews
Global Capacity: Bandwidth Demand Driving Ethernet Growth

7|6|17   |   6:37   |   (0) comments


At Light Reading's Big Communications Event in Austin, Texas, Global Capacity's VP of Marketing Mary Stanhope talks about how the demand for bandwidth is changing the way service providers deliver broadband services.
LRTV Interviews
Colt's Services Chief on Digital Delivery

7|5|17   |   16:12   |   (0) comments


Rogier Bronsgeest, the chief customer experience officer (chief CEO!) at Colt, discusses the way in which the service provider interacts with its customers these days and his aggressive net promoter score (NPS) targets.
Women in Comms Introduction Videos
BT VP: Women Should Fill Security Talent Gap

7|5|17   |   6:00   |   (2) comments


By 2020 there will be six security jobs for every qualified worker, and Kate Kuehn, vice president of Security for BT in the Americas, says BT wants to encourage women to fill the shortage in jobs.
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
BBC Head: We Must Reinvent Broadcasting for a New Generation
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 7/21/2017
NFV, SDN, Big Data – It's All About Automation
Craig Matsumoto, Editor-in-Chief, Light Reading, 7/21/2017
What's a Little Throttling Between Friends?
Mari Silbey, Senior Editor, Cable/Video, 7/24/2017
AT&T's Tech President Preps Workforce for the Future
Kelsey Kusterer Ziser, Editor, 7/26/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.