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Optical/IP

Extreme Juniper Rumors Are Back

Like some classic rock song that repeats it self over and over on the radio, rumors that Juniper Networks Inc. (Nasdaq: JNPR) is buying Extreme Networks Inc. (Nasdaq: EXTR) are back on the Wall Street airwaves.

One fund manager source, who asked not to be named, says that's what's driven Extreme stock today, which gained $0.21 (4.78%) to $6.40. In fact, Extreme shares traded an unusually large volume of 2.5 million shares, compared to an average of 1.9 million.

Here's a quick regurgitation of the story line: Juniper is moving into the enterprise networking market in direct competition with Cisco Systems Inc. (Nasdaq: CSCO), in a big way. There are several things Extreme has that Juniper might want, including Gigabit Ethernet technology, enterprise customers, and a wireless LAN switching product line.

Extreme had resurfaced as a hot acquisition prospect when Juniper's last shopping binge was just starting to get underway (see Juniper's Slow Shopping Trip and Valley Wonk: Juniper's Shopping List).

But all of this has been said before, without a deal panning out (see Juniper's Extreme Thoughts Are Back, Would Juniper Go to Extremes?, and Juniper To Buy Extreme? ).

One thing that might help grease the wheels? Extreme's stock is trading close to all-time lows, and its market capitalization is just $560 million, giving it a price-to-sales ratio of just 1.5.

Extreme and Juniper spokespeople had no comment on the rumors.

— R. Scott Raynovich, US Editor, Light Reading

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opticalman 12/5/2012 | 3:14:10 AM
re: Extreme Juniper Rumors Are Back For Pete's sake, spare us all the suspense and do it.
sgamble 12/5/2012 | 3:14:09 AM
re: Extreme Juniper Rumors Are Back Someone needs to throw Scott and Bobby in a room and lock the key. Juniper will be stuck with nobody else but Extreme if Foundry doesn't play ball.

Just do it!
change_is_good 12/5/2012 | 3:14:07 AM
re: Extreme Juniper Rumors Are Back scott never liked bobby. one has to question selling a commodity against a low margin gorilla. you need to pick your battles.
lilgatsby 12/5/2012 | 3:14:06 AM
re: Extreme Juniper Rumors Are Back FDRY doesn't have enough differentiation to justify a purchase over EXTR, they are both a lovely flavour of vanilla that add little to JNPR except the promise of decreased margins and lackluster market perception.

Flip coin, offer winner 400m, if there is no taker...move on to the next vanilla.

lg
RDV 12/5/2012 | 3:14:04 AM
re: Extreme Juniper Rumors Are Back LG,

Why doesn't FDRY have enough differentiation over EXTR? Have you seen how flakey the code is in the Aspen i.e. BD 8800, and as for the BD10k to say that they're behind release schedule for features/functions they you're seriously being kind.

Foundry have a hell of a lot to offer to a JNPR purchase - they are the ONLY real alternative to CSCO in the market.

EXTR - Somewhat a red-herring to be honest, marketplace hasn't accepted them entirely especially carrier (in fact I know carriers that have laughed at them incredibly when proposed!)

F10 - LOL! These guys have high end Core product and nothing else!

FDRY - Wireless, L 4-7 (market leading!), Layer-2/3 Edge and Core devices - both Enterprise and Core!, Layer-3 WAN - the IMR will seriously cause some concern in certain quarters due to price/performance - check feature sets and you'll see there is not much missing.

Name me another option and I'll tell you why FDRY beat them as an option as well.

Don't get me wrong, I see issue with FDRY kit every day, but I see more from CSCO, EXTR & F1O!

Iipoed 12/5/2012 | 3:14:03 AM
re: Extreme Juniper Rumors Are Back RDV-right on post. Also don't forget FDRY sells direct 90%, Extr sell via any channel that wants their stuff 90%. JNPR is direct as well
FDRY's sales and SEs are senior. EXTR has the highest turnover as well as many entry level tech sales people.
On paper JNPR/FDRY is the by far the correct choice.
Then you factor in Scott vs Bobby.
Therefore this won't happen
startup_shutup 12/5/2012 | 3:14:02 AM
re: Extreme Juniper Rumors Are Back more than that would be an outrage and shame!
RDV 12/5/2012 | 3:14:00 AM
re: Extreme Juniper Rumors Are Back Lipoed

I agree that it won't happen, however its a damn shame as far as I can tell as this would form a company that would certainly deliver a definitive alternative to Cisco which the market is crying out for.

Only issues I could see would be that JNPR need to get a product/solution for Enterprise telephony if they were to move forward, something like broadsoft would be a good call - though that would be from a carrier/hosted telephony viewpoint. Another option could be Sonus though I've never had experience with their tech.

Its a crying shame, but c'est la vie.

Iipoed, am I right in thinking you used to work at FDRY a while ago?

alchemy 12/5/2012 | 3:14:00 AM
re: Extreme Juniper Rumors Are Back RDV writes:
Only issues I could see would be that JNPR need to get a product/solution for Enterprise telephony if they were to move forward, something like broadsoft would be a good call - though that would be from a carrier/hosted telephony viewpoint. Another option could be Sonus though I've never had experience with their tech.

Telephony is a pretty big divergence from Juniper's core competence. Juniper seems to "get" carrier class better than Cisco but it's not clear that they have the vision to pick the right acquisistion to get an injection of telephone DNA. Broadsoft would be very expensive for what you get in revenue stream. With Sonus, you're getting products that are becoming rather long in the tooth and a record of very lumpy sales. The Sonus core competence is also VoIP in the backbone, not subscriber-facing VoIP which is a much more difficult problem to solve. I don't see where either of those companies helps Juniper sell into accounts where they're having trouble getting traction against Cisco.
firstmile 12/5/2012 | 3:13:59 AM
re: Extreme Juniper Rumors Are Back Last week's announcement that Hitesh was joining JNPR as the VP of Enterprise products. Hitesh just left cisco where he was a key exec in desktop switching (i.e., Catalyst stuff).
It would be nice to hire a new guy, from cisco, to integrate Extreme into Juniper....
Oh yeah, by the way...Bobby can't move into anyone elses company and play second fiddle.
Extreme is the one.
...first
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