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Juniper Partners 'Dumbfounded' By Nokia Acquisition Reports

Juniper partners say they are 'shocked' by reports of a potential Nokia-Juniper merger, and that the move, should it happen, would likely deal a blow to the channel.

Juniper Networks partners say they are shocked by a report Thursday of Nokia eyeing an acquisition of Juniper, and that the move, should it pan out, wouldn't be a positive one for the channel.

"I would just be dumbfounded, unless it was some 'offer-they-can't-refuse' type of thing," said the president of one Juniper solution provider, who asked not to be named, of Nokia's reported interest in Juniper. "I would be shocked that Juniper would want to go down that path. At that point, in my mind, it would be all bets off. I could probably think of nine other people that it would make more sense [for Juniper] to be aligned with."

According to a report Thursday from German news publication Manager Magazin citing unnamed sources, Finland-based Nokia is reportedly plotting a move to acquire Sunnyvale, Calif.-based Juniper, in a bid to grow its own networking portfolio and strengthen its position in the U.S. market.

[Related: New CEO Kheradpir Lays Out Vision For Future Of Juniper Networks ]

The report said that Rajeev Suri, chief executive of Nokia Solutions and Networks (NSN), the networking arm of Nokia, made a trip to the U.S. late in 2013 to meet with Juniper executives about a potential merger.

Juniper shares jumped nearly 3 percent Thursday on reports of the deal.

The president of the Juniper solution provider, who asked not to be named, said that any acquisition of Juniper at this time would come as a surprise, given the messaging he has heard from new Juniper CEO Shaygan Kheradpir and his sense, as a partner, that Juniper wants to "find a way to do this thing on their own."

"It's a mind-bender for me," the partner said, adding that, of all the companies he could see making a bid for Juniper, Nokia "certainly isn't one of them."

"Nokia is a big, international company and the problems that I have are that they are very handset-related, and when I think about Nokia, I think about somebody who has completely dropped the ball over a four- or five-year period," the partner said.

Both Nokia and Juniper declined CRN's request for comment, citing company policy of not commenting on "rumor or speculation."

The deal, should it pan out, would come as Nokia is set to close the blockbuster sale of its handset and devices business to Microsoft for $7.2 billion sometime next month.

NEXT: What Would Nokia Do With Juniper's Enterprise Business?


A Nokia deal also would mark the first big M&A move for Kheradpir, who officially took to the Juniper helm on Jan. 1.

Kheradpir, who was COO at finance giant Barclays before joining Juniper, said in January he was readying an "Integrated Operating Plan" for Juniper, in response to mounting pressure from Juniper investor Elliott Management to cut costs and sell off underperforming assets.

Jason Gress, founder and president of InterVision Systems Technologies, a Santa Clara, Calif.-based Juniper partner, said Nokia buying Juniper would have a ’huge negative impact’ on both Juniper partners and customers' perception of Juniper’s technology.

"From a channel and customer perspective, we have a certain business cadence that usually changes and is disrupted with acquisitions," Gress wrote in an email to CRN. "Customers may have a different perception that doing business with Nokia is not the same as Juniper."

NSN's Suri has been bullish about expanding NSN's U.S. presence, and told Bloomberg in November that a recent customer win with Sprint shows the company is "definitely making progress." T-Mobile is also an NSN customer.

Zeus Kerravala, founder and principal analyst with ZK Research, said Nokia looking to acquire Juniper would make sense, given the pressure faced by telecom equipment providers today to provide end-to-end solutions, including both wired and wireless solutions. He also said the deal would likely result in NSN spinning off Juniper's enterprise business, given NSN's focus on the carrier market.

"I think, for both companies, it would be a pretty significant move," Kerravala said. "The big question would be, 'What would Nokia do with Juniper's enterprise business?'"

Chris Becerra, vice president of sales at Terrapin Systems, a San Jose, Calif.-based solution provider, said he doesn't see Juniper ever completely "abandoning" its channel model. He still, however, would brace himself for a potentially bumpy road ahead if Nokia were to make a move.

"I hope [Juniper] keeps allowing us to make money on deals and allows us to provide value and get paid for our value," Becerra said. "I'm not too concerned they would abandon the channel 100 percent. I don’t know how they would be able to support that system. But would the dynamics change? Yes. And would they be for the better? Who knows. I think that things might change for the worse."

PUBLISHED FEB. 20, 2014

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