Juniper buys Unisphere Networks

Juniper Networks this morning announced that it plans to acquire Unisphere Networks for approximately $740 million. Of that amount, $375 million is cash. The deal is scheduled to close in the third quarter.

“This is a natural extension of both companies in their previously independent initiatives,” said Scott Kriens, chairman and CEO of Juniper. Kriens feels the deal will be synergistic because of Juniper’s foundation in the core and migration out to the edge and Unisphere’s concentration on edge products. “The [companies] are different but highly complimentary,” Kriens said.

The deal is also likely to raise some eyebrows at Cisco, which competes heavily with both Juniper and Unisphere already. And while much of the core router spending has dried up, the edge where Unisphere concentrates is considered by many to be a sweet spot. That said, according to most analyst estimates, Cisco still holds the lion share of the overall router market.

The two companies already share some customers, such as France Telecom and Deutsche Telekom. In those cases, the service providers have Juniper core routers deployed and Unisphere’s ERX edge router. The ERX router is Unisphere’s largest revenue driver and was of the most interest to Juniper.

Although Juniper has always touted the unanimity of its JUNOS software across all of its equipment, the addition of the Unisphere equipment will apparently keep its existing software. The companies pushed the existing deployments where the service providers used both companies’ equipment without the need for involvement from Juniper and Unisphere.

And according to Kriens, beyond the equipment’s ability to work together and expand Juniper’s portfolio, both companies agree on the use of IP. “The Internet has fundamentally disrupted the telecommunications industry, and there’s a new network being built and it’s an IP network,” Kriens said.

Juniper and Siemens, which is Unisphere’s parent company, have also set up an OEM agreement as a result of the acquisition.