Juniper Buying Networking Startups For $469M

The company plans to pay $337 million in cash, stock and assumed options for Peribit, Santa Clara, Calif., and $132 million in cash and assumed stock options for Redline, Campbell, Calif. The deals are expected to close in the third and second quarters, respectively.

The two privately held startups produced combined revenue of approximately $40 million in 2004.

The acquisitions will add new technologies to Juniper's enterprise portfolio, including Peribit's lineup of WAN optimization appliances and Redline's Web application acceleration devices.

"This gives Juniper a bigger, better offering," said Jason Gress, founder and executive vice president of InterVision Systems Technologies, a Santa Clara-based solution provider that works with all three companies.

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Gress said products from Peribit and Redline both help customers save money and do more with less. Through HTTP acceleration, Redline's devices can reduce the number of Web servers customers need to deploy to support Web-based applications, while Peribit's WAN optimization capabilities can help customers cut bandwidth consumption, he said.

Products from the two acquisitions address application performance and security issues that arise as customers seek mobile access to applications that were originally built to be connected to local users, said Scott Kriens, chairman and CEO of Sunnyvale, Calif.-based Juniper, during a conference call.

"The complexity of securing the application and assuring the performance for the user when they become global and mobile at the same time is at the very cutting edge of the technology we have today in the industry, which is why you find Juniper interested in this problem in the first place," Kriens said.

Juniper plans to explore ways to integrate the new capabilities with its existing enterprise security and routing products, he said.

"It's all around the same theme, which is learning a lot more about the traffic flows, and then in real-time using that knowledge to make important decisions, and tying it all together is a tremendous opportunity," Kriens said. "By operating in concert with firewalls, for example, you can make decisions about traffic before it gets encrypted, and if you operate independently and you're assembling a chorus line of these point products, you can't do that," he said.

Kriens also said the new acquisitions would fit into Juniper's channel strategy.

"Our distribution organization will play a significant role in taking these technologies to market, so we clearly think our distribution strength will be an advantage here," he said.

Juniper first entered the enterprise market a year ago through its purchase of security vendor NetScreen Technologies. It is also in the midst of expanding its service provider infrastructure portfolio through its pending acquisition of Kagoor Networks, a vendor of session border controllers used by VoIP service providers.

While the new acquisitions move Juniper deeper into the enterprise market, they still leave the vendor without a line of network switches, a piece solution providers and other industry observers said would improve the vendors' standing against rival Cisco Systems.