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Commentary: Net gain for Juniper

With its planned purchase of NetScreen, Juniper vaults into the security market and squares off credibly with Cisco for combined networking and security deals.

Commentary: Net gain for Juniper
By Forrester Research
Special to CNET
February 10, 2004, 2:30PM PT

By Laura Koetzle, Senior Analyst

Juniper Networks has agreed to buy NetScreen Technologies in an all-stock deal. With NetScreen, Juniper vaults into the security market, acquires NetScreen's enterprise-focused channel, and squares off credibly with Cisco Systems for combined networking and security deals.

Forrester spoke about the acquisition with Chris Roeckl, director of corporate marketing at NetScreen, and Kate Clark, senior manager of analyst relations at Juniper. The upshot:

• Juniper and NetScreen complement each other, rather than clash. The deal gives the combined entity credibility and strong sales delivery channels in both the service provider and corporate markets. Juniper derived more than 95 percent of its 2003 revenue from routing and switching sales to service providers. In contrast, sales to enterprise clients accounted for 70 percent of NetScreen's revenue. Juniper needs the enterprise market to grow, and buyers need vendor choice to keep Cisco's prices down.

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• Similar design focus is a plus, but the combined company must look beyond ASICs. Both Juniper and NetScreen use application-specific integrated circuit (ASIC) designs to outperform their competitors. Because ASICs are less flexible than general-purpose processors, the combined entity must consider ditching ASICs if cheaper choices like network processors achieve sufficient levels of performance.

• Juniper/NetScreen can succeed against Cisco with integrated management. To take on Cisco, the merged company must provide a single management console for Juniper and NetScreen products that can compete with CiscoWorks. With unified management, the broadband routing gear Juniper picked up from Unisphere Networks, and the SSL VPN capabilities that NetScreen acquired from Neoteris, users should consider Juniper/NetScreen a real alternative to Cisco for combined networking and security deals.

© 2004, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.