Juniper (s jnpr)announced plans to purchase stealthy networking startup Contrail Systems for $176 million in stock and cash. The deal, which Juniper disclosed in an SEC filing, and tiny blog post, was struck last week and should close before the end of this year. Contrail gets $57.5 million in cash plus 5,819,148 shares of Juniper stock.
That’s a wonderful return for Contrail’s investors, which this summer put $10 million in the startup (Juniper was a strategic investor in that round). It’s also a smart move for Juniper coming just a few weeks after Cisco announced its own SDN-related purchase, a $141 million purchase of Cariden, although that was more about network virtualization for service provider customers and delivering carrier apps on top of its platform.
By comparison, Contrail is more of an enterprise software-defined networking play. The company has a few test customers and aims to make network virtualization as well as network-aware applications easier for enterprises to stomach. The company is pitching a distributed networking operating system as well as an orchestration layer that supports a variety of common protocols like XMPP and BGP. This means it will run on top of already deployed Cisco (s csco) and Juniper gear.
Juniper has worked to build out software that addresses the changing traffic patterns in the data center. With this deal it gets a team — from Aruba and Google(s goog) — that is aware of challenges faced by enterprise customers. These companies want the advantages of SDN without hiring a team of specialized network engineers and replacing all their gear. As players jockeying for space in the software defined networking sector solidify their offerings (Contrail’s was supposed to come out in 2013) it’s clear that big vendors such as Cisco, VMware(s vmw) and Juniper — which want to make sure the market goes their way — are getting aggressive when it comes to claiming their turf.