A strange event happened a few weeks ago: Juniper acquired Redline and Peribit. Why is that strange? Because this is the first time in a very long while that a viable company has openly challenged Cisco for supremacy in the enterprise WAN marketplace. The last time that happened, the company was Cabletron, the venue was Interop in Atlanta, and the results were all in favor of Cisco.
Juniper paid $469 million for Redline and Peribit. While that certainly pales compared to the $4 billion that Juniper paid for NetScreen, it is still very intriguing. It's intriguing because it is another proof point that Juniper is serious about going after the lucrative enterprise market.
How lucrative is the enterprise market? Roughly 80% of Cisco's revenue stream comes from selling 1990s technology to enterprise companies. This cash cow funds Cisco's attempts to penetrate other markets, such as the service provider arena.
We believe that Cisco will respond to the Juniper acquisition by making an acquisition of its own. However, it is difficult to picture Cisco acquiring a company with a heavy emphasis on compression and caching. That is just not part of Cisco's DNA.
Cisco already has a wide-area file services offering based on technology from its Actona Technologies acquisition. What Cisco could be shopping for is the ability to accelerate key applications such as Microsoft Exchange. Stay tuned - this battle is just warming up.