Siemens sees cooperation as way to beat Cisco

Siemens AG has no regrets about its decision to sell edge router manufacturer Unisphere Networks Inc. to Juniper Networks Inc., even if some critics interpreted the move as a retreat from a router market dominated by Cisco Systems Inc.

"We didn't step out of the market when we sold Unisphere to Juniper," Thomas Ganswindt, a Siemens board member responsible for the group's Information and Communication Networks division, said Wednesday here at a news conference. "We just changed the model."

Unisphere was created by Siemens in 1999 through its acquisitions and integration of Argon Networks of Littleton, Massachusetts, Castle Networks of Westford, Massachusetts, and several units of Siemens Information and Communication Networks in Boca Raton, Florida.

Juniper, of Sunnyvale, California, later bought Unisphere to bolster its portfolio of edge routers and increase its overall market share in the switch and router markets.

Now Siemens has a reseller agreement with Juniper to market its edge and core router products to carriers and enterprises, Ganswindt said.

"We are Juniper's largest revenue generator," he said. "And we remain the company's largest shareholder with our 10 percent stake."

In addition to the reseller agreement, Siemens has a research and development partnership with Juniper, according to Ganswindt.

Asked if he was concerned about Telefonaktiebolaget LM Ericsson collaborating with Juniper in developing new products and rumors that Lucent Technologies may also forge a partnership with the router maker, the Siemens executive said "not at all."

On the contrary, "we need stronger competition to Cisco," he said. "We need to see more manufacturers cooperate with Juniper to make Juniper a stronger competitor. Competition is good for prices and competition."

Unwilling to make revenue forecasts for the 2003 fiscal year, Ganswindt said he expects a turnaround in the division's carrier operations by the fourth quarter.

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