Netscreen acquisition could bear fruit for Juniper

Router company Juniper Networks' acquisition of NetScreen Technologies has been seen by analysts as an attempt to gain ground...

Router company Juniper Networks' acquisition of NetScreen Technologies has been seen by analysts as an attempt to gain ground against Cisco Systems in the enterprise network arena, although they admitted that nothing is likely to happen in the near future.

Last week, Juniper agreed to acquire NetScreen, a supplier of firewalls and virtual private network technology, in a stock deal valued at approximately $4bn.

A top Juniper executive downplayed the notion that the deal was designed to bring the company into a new market, but pointedly dismissed the distinction between carrier and enterprise networks. Christine Heckart, vice president of marketing at Juniper, said the aim is to provide networks reliable and flexible enough to keep all kinds of fixed and mobile devices connected.

"The whole distinction between service provider and enterprise is very outdated," she added.

"If you need a virtual resource, a network that will respond to your business needs and a network that is mission critical ... then you're in our customer base. How you classify your business is not going to determine whether or not you're a viable target customer for Juniper."

Juniper was founded in 1996 with financial backing from some of Cisco's biggest rivals, and headed for Cisco's traditional stomping ground at the core of large IP networks. Despite Cisco's head start of several years in the router industry, Juniper has made significant inroads in service provider networks.

In 2003, Juniper captured 31% of the world's revenue for high-end routers, those that offer interfaces of 10Gbps or higher, according to Dell'Oro Group analyst Shin Umeda. That represented a gain of five percentage points from 2002, while Cisco's share fell five points to 62%.

However, Juniper does not make routers for enterprises and has not had a way to sell to those customers if they did, according to Frank Dzubeck, an analyst at Communications Network Architects.

Juniper's market share in that segment is minimal by design, while Cisco holds more than 90% of the market, said Dell'Oro's Umeda.

Dzubeck believed the NetScreen acquisition is an attempt to change this state of affairs.

"This is Juniper's way to get into the enterprise," he said. It can take advantage of NetScreen's sales channels and save itself the time and expense of building up its own organisation for that job. Over time, it also can boost the capabilities of its routers for service providers by adapting NetScreen's security technology. With it, service providers might be able to filter out viruses from e-mail and stop denial-of-service attacks."

Putting those services in the carrier network rather than at the enterprise would be a good idea, he said, citing the recent MyDoom attack that hit the SCO Group website this month.

"Why couldn't that have been filtered out before they got bombarded? There's an awful lot of things that can be done if the edge of the network and the core of the network turn out to be incredibly intelligent," Dzubeck said.

Being able to get those kinds of protection from a service provider could be a boon to enterprises, mainly at their branch offices, said Yankee Group analyst Zeus Kerravala. At corporate headquarters, firewall functions will probably remain in place, although they will move from specialised appliances into sophisticated routers or switches, he added.

Kerravala agreed the vision of more built-in security is shared by Cisco, although he admitted Juniper will face an uphill battle if it tried to take on Cisco in the enterprise.

Over the years, Cisco has built a broad lineup of routers, switches and other devices for different-sized companies and many parts of the enterprise. Juniper's history so far has taken the opposite track, as the company focused on building one type of product well.

"Juniper's just a very sharp hunting knife. ... Cisco takes much more of a Swiss Army approach," Kerravala said.

Stephen Lawson writes for IDG News Service

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