Analyst believes rival and quarry were about to get tighter
Did Cisco steal away Juniper’s wireless partner by acquiring Starent Networks? So says UBS analyst Nikos Theodosopoulos, who states in a report that the two were about to formally announce their union to target the enhanced packet core of 4G networks.
Cisco this week announced plans to buy Starent for $2.9 billion. Among other capabilities, Starent’s products — which enable access to an IP core from several radio access networks — would give Cisco a legitimate LTE offering after it invested hundreds of millions in WiMAX.
This could be a major coup for Cisco as Starent’s products appear to be unique in the market, according to Theodosopoulos. That leaves Juniper at the altar:
We see the development as negative for Juniper, as STAR was its wireless data partner (we expected a formal announcement at JNPR Oct 29 analyst event in NY). Juniper will no longer have an evolved packet core partner and no other obvious candidates exist in this market
The Cisco/Starent deal likely impacts Juniper’s position in AT&T’s IP “domain” vendor selection process where it was engaged with Starent and Tellabs, UBS reports. Further, it puts additional R&D drag on the company to fill this gap — Theodosopoulos notes that Juniper R&D is already stretched by FCoE requirements in the data center, key to its Project Stratus cloud computing plan.
So, Cisco’s bought two companies in the span of two weeks for $6 billion. Who will the next acquirer be? Theodosopoulos believes Juniper, with its R&D burden, may counterstrike:
Juniper may need to consider an acquisition to help alleviate the 2010/2011 R&D load…
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