Juniper splashes $450M on AI hotshot 128 Technology

Routers-and-switches guru Juniper is stumping up nearly half a billion US dollars for 128 Technology, a Boston area startup that owns some clever software for wide area network (WAN) connectivity.

128 is to become the latest ingredient in Juniper's bubbling cauldron of WAN and software-defined-WAN offerings, mixing in with its WAN Assurance software, branch SRX portfolio and Marvis-branded virtual network assistant.

Drop that magic potion into your customer's WAN and it will basically run itself. That's the broad idea, anyway. The company's actual statement refers to all manner of technical wizardry, including "customizable service levels," "proactive anomaly detection" and "real-time threat intelligence."

But they all add up to what Juniper has for some time been calling a "self-driving network" – one that can be entrusted with the operational stuff so that technicians can play golf, write that novel or simply prop up the local bar.

Misty AI'd

Underpinning it all is Mist AI, a system Juniper acquired with its $405 million takeover of Mist Systems in March last year.

Andy Ory, 128's founder and CEO, reckons the combination of his own company's Session Smart Router, its flagship product, with Juniper's Mist AI-driven portfolio will make "a big impact on a very large, yet still highly under-served, WAN-Edge market."

It obviously helps that Juniper has a customer base as well as sales and marketing channels that 128 has lacked. Analysts and experts have been deliberating about Juniper's latest takeover in the virtual corridors of LinkedIn.

In an open discussion, Tom Nolle, the president of CIMI Corp, described the acquisition as "the smartest buy in the SD-WAN space that any vendor has made. The question, as always, will be what Juniper does with it," he wrote. "They don't always have a great record of exploiting their M&A optimally."

Faisal Khan, an executive at Saudi Arabia's Mobily and an SD-WAN subject matter expert for the Metro Ethernet Forum, said: "128 Technology's tunnel-less technology in the SD-WAN space is unique and different from the rest. This is an interesting acquisition."

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Juniper's move follows its payment of an undisclosed amount for Netrounds, a network testing and monitoring specialist based in Sweden. That deal was also about strengthening the line-up of automated WAN products and came after Juniper CEO Rami Rahim had highlighted customer interest in "next-gen cloud-delivered AI-driven solutions" during a call with investors.

The company's cloud and enterprise divisions have been strong points this year as sales to service providers, Juniper's largest customer segment, have declined.

Overall revenues at the firm were down about 1% for the first six months of the year, to around $2.08 billion, compared with the year-earlier half, while net income rose almost 6%, to $81.6 million.

Juniper expects to close the 128 takeover in the fourth quarter of 2020 and reckons it will be "slightly accretive to revenue and gross margins," but dilutive to earnings per share, next year.

It says the $450 million fee will be "payable in cash and the assumption of outstanding equity awards."

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— Iain Morris, International Editor, Light Reading