Juniper targets the enterprise with $3.6bn security buy

10 February 2004 Telecoms hardware maker Juniper Networks last night surprisingly cast off its carrier-only strategy with the $3.6 billion acquisition of NetScreen Technologies, a fast-growing corporate network security specialist.

The move will bring Juniper into direct competition for new enterprise sales with networking equipment giant Cisco Systems, its long-time rival in the carrier and ISP sectors.

The deal represents a major shift in direction for Juniper. Executives at the high-end networking equipment maker had previously said that they would never target what they dismissively saw as ‘low-end’ corporate buyers.

But Juniper CEO Scott Kriens yesterday played down the differences between selling to the telecoms sector and the wider corporate market. “The question is not whether the network is service provider or enterprise. Those distinctions are outdated,” he said.

NetScreen, which develops a range of security products including virtual private networks, intrusion prevention appliances and firewalls, has grown rapidly since it was founded in 1997, generating revenue of $245 million in 2003.

Juniper followers welcomed the deal, saying that it is imperative for network suppliers with ambitions in the enterprise sector to beef up their security offerings.

“Juniper has done a great job competing with Cisco for the telecoms router business,” says Jeff Wilson of Infonetics Research. “Yet a company that can compete with Cisco in the enterprise needs security in its products. This is a great start towards building that company.”

Muayyad Al-Chalabi of analyst firm RHK agrees. “This is definitely an attempt by Juniper to get away from being a one-trick pony…everyone is looking at security,” he says.

The deal comes amid growing signs of a recovery in the telecoms equipment market.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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