SDN Watch: Juniper Picks Off Startup Contrail Systems5:30 PM EST Wed. Dec. 12, 2012
It isn't the $1.2 billion purse of another major software-defined networking (SDN) acquisition this year, but another buzzed-about SDN startup is getting swallowed up by an incumbent networking vendor.
Juniper Wednesday confirmed it will acquire Contrail Systems, a Santa Clara, Calif.-based startup that was founded early in 2012 and in which Juniper was a strategic investor. In an 8-K filing with the U.S. Securities and Exchange Commission, Juniper said it will pay $176 million in cash and stock for the company.
Contrail is run by networking industry veterans, including CEO Ankur Singla, former CTO and engineering vice president at Aruba Networks, and CTO Kireeti Kompella, former CTO and chief architect for Junos at Juniper. Contrail copped $10 million in a July Series A round led by Khosla Ventures, and according to industry sources was preparing to emerge from stealth mode this week with an open, standards-based cloud networking platform.
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"With this acquisition, Juniper gains SDN technology that augments our portfolio of products and services," Bob Muglia, executive vice president, software solutions, at Juniper wrote in a brief corporate blog post.
Juniper declined to provide additional comment. The company, which has so far addressed the SDN trend glancingly with support for major protocols like OpenFlow, is expected to hit the market with a full-fledged SDN strategy in the new year. Robyn Denholm, Juniper's CFO, also told investors earlier this week that QFabric -- Juniper's converged infrastructure system and strategy for both flattening and making more flexible the traditional data center -- anticipated the SDN trend with its emphasis on virtualized networking and programmability.
SDN is expected to be a magnet for both venture capital funding and M&A activity in the new year. Several SDN startups, from Big Switch Networks and Plexxi to Embrane and Midokura, have emerged from stealth mode, made significant product launches, confirmed multimillion-dollar funding rounds or entered the U.S. market in the past two months.
Juniper has been largely quiet on the M&A front lately as it finishes up a painful restructuring; its most recent buy was security firm Mykonos back in February. Denholm did tell investors at the Raymond James IT Supply Chain Conference in New York this week that Juniper would continue to look for and make "tuck-in" acquisitions.
PUBLISHED DEC. 12, 2012