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Cisco's Starent Buy Puts Juniper at a Crossroads

starent0Did Cisco (s csco) snap up Starent (s star) on the eve of the telecom equipment provider announcing a partnership deal with Juniper Networks (s jnpr), Cisco’s rival in both switching equipment and telecommunications gear? Two analysts seem to think so, with Nikos Theodosopoulos, an analyst from UBS, writing that Cisco’s $2.9 billion deal to buy Starent hurts Juniper, which was expected to announce Starent as its wireless partner at an analyst day event Oct. 28-29. Jonathan Goldberg, an analyst at DB Equity Research, also said via email that the deal puts considerable hurt on Juniper, which now has to figure out a wireless strategy. He also anticipated a Starent-Juniper partnership announcement at the upcoming analyst day.

Juniper has not returned calls for comment, but the company is in a tough position as it attempts to keep costs in line, while investing R&D dollars into two very different markets. On the service provider side, it needs a wireless strategy that helps it transition carriers to a 4G infrastructure, something Starent would have done, and the reason analysts expected some kind of Juniper-Starent announcement in two weeks. It also needs to keep an eye on the data center market and the creation of a network fabric that will help it fend off Cisco’s unified computing systems and HP’s networking gear. We suggested last week that Brocade might be a good acquisition target, primarily because Juniper could then focus more on wireless R&D. However, with Cisco swooping in on the wireless side, Juniper has some serious decision-making ahead of it.

5 Responses to “Cisco's Starent Buy Puts Juniper at a Crossroads”

  1. Michael Marrs

    Starent builds gateways that connect different types of network accesses. I guess its a evolved type of Session Border Controller. This was a area that was ripe with many startups in the mid 2000s. I believe Acme Packet is the only SBC company left, but they don’t seem to have the breadth of functionality as Starent and they seem to have concentrated on Enterprise to Service Provider connectivity.

    Cisco itself had its own SBC software called CUBE (cisco unified border element) so I’m assuming that the Starent brings much more to the mix. I suppose Juniper could buy Acme Packet to influence its R&D to counter the Starent/Cisco product.

  2. Juniper is banking heavily upon thier partnership with NSN. If they would have also executed with Starent it would have placed Cisco in a difficult position with Juniper and Huwei gaining on the telco turf…

  3. good point. also puts nsn & mot in tough place. even e\\ will come under pressure as redback platform is not ideal for epc.

    the only one that can capitalize on this is wichorus.

    other startups are all smoke…