Juniper's Designs on Packet Design

Juniper Networks Inc. (NYSE: JNPR) has invested $2 million in Packet Design Inc. , a routing analytics company, as part of the startup's $12 million, fourth round of private funding, announced earlier today. (See Packet Design Raises $12M.)

Packet Design, founded by former Cisco chief technology officer Judy Estrin and former Cisco chief scientist Van Jacobson, is best known for helping carriers figure out which of their current IP traffic routes have problems while helping predict which routes will have problems later on. (See Packet Design's Routing 'Spy' .)

The company recently boasted that it helped Covad Communications Inc. subsidiary Covad Wireless "prove to a major router vendor that its equipment was causing an intermittent outage." All we know about that "major router vendor" is that it probably wasn't Avici Systems.

So what does Juniper want with a smarty-pants startup that rats out buggy routers?

Mike Harding, the Juniper vice president of network management quoted in Packet Design's press release, hasn't returned a call.

But our sources suggest that routing vendors, which are always looking to become more valuable to carriers, are eager to tack on various services to go with their hardware. Product management and performance monitoring fall neatly into Packet Design's capabilities, so there's a possibility Juniper might be warming up to an OEM agreement somewhere down the road.

Packet Design, of course, wouldn't comment on that possibility.

From a venture capitalist point-of-view, Packet Design also embodies a trend in which Juniper is deeply invested. IP services are in demand, and the networks carrying those services are becoming more complex to build and manage. The ability to predict route failures and simulate traffic spikes, and other Packet Design tricks, become more necessary to carriers and enterprises aiming to add network capacity without disrupting their most profitable customers.

Even if Juniper doesn't resell Packet Design's products, another router vendor might someday buy the startup, and Juniper's investment would pay off handsomely.

Packet Design's other investors include Advanced Technology Ventures, Masthead Venture Partners Corp. , and Mayfield . The company has about a 50-50 split of enterprise and service provider customers and says it should be close to a break-even cash flow by the end of 2009.

The company has raised $44.5 million to date, with a $14.5 million round in 2003, a $10.5 million round in 2005, and a $7.5 million haul in 2006.

— Phil Harvey, Editor, Light Reading
DCITDave 12/5/2012 | 3:32:15 PM
re: Juniper's Designs on Packet Design Judy Estrin has sold at least one company to Cisco. Might this be one she sells to Juniper?
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