Juniper Networks's acquisition of Unisphere Networks enables Juniper to regain the No. 2 spot in edge routers and tap the global distribution reach and customer base of Unisphere parent Siemens AG.
Juniper, the No. 3 edge router company, last week purchased No. 2 Unisphere in a cash-and-stock deal valued at US$740 million. Unisphere leapfrogged Juniper into the No. 2 spot last year, according to Dell'Oro Group Inc.
In addition to instantly gaining a higher ranking in market share, Juniper gains its third giant distributor with access to carriers around the world. Juniper already has distribution agreements with L.M. Ericsson Telephone Co. and Nortel Networks Corp., and through this acquisition, the company inherits an existing relationship between Unisphere and Siemens.
The deal also effectively marks Juniper's entry into the DSL market, and gives the company DSL (Digital Subscriber Line) aggregation and subscriber management capabilities that, for the time being, will augment its own edge portfolio of T-1/T-3 dedicated access platforms. Unisphere's routers may also give Juniper a more appealing lineup of products with which to court the coveted incumbent local exchange carrier/regional Bell operating company business in the U.S.
ILECs are building out DSL as a broadband access alternative to cable. Juniper entered the cable modem termination system market with last year's acquisition of Pacific Broadband.
But questions remain in terms of product overlap and how the operating systems of both companies' routers will be integrated, if ever. One of the attractions of Juniper is a single, common version of its JUNOS operating system running across its entire product line, from edge to core.
This is in contrast to Cisco, which Juniper says has 16 different versions of IOS running on its Internet routers today.
Juniper is hinting that it will go with two different operating systems at the edge - for now. Juniper's operating system is optimized for core routing, and Unisphere's is customized for handling aggregation and subscriber management, says Joe Furgerson, Juniper's vice president of strategy and product marketing.
Another big question is what will happen to the Juniper M5, M10 and M20 edge routers. Juniper CEO Scott Kriens says a product integration strategy and roadmap has yet to be defined, but other Juniper officials say the company's current edge offerings are still viable.
"They are all-purpose entry platforms and are used for small cores," Furgerson says. "They sell for overlay applications such as multicast, and circuit aggregation with channelized E-1s. We're not going to stop [them]."
The deal is expected to close by year-end. Lloyd Carney, Juniper's chief operating officer, will be in charge of all research and development for Juniper and the research team it acquires with Unisphere.