28 Sep Juniper buys Netrounds to hammer networks into shape | Light Reading
Juniper Networks said it would acquire Netrounds for an undisclosed fee to strengthen its line-up of wide area networking (WAN) products.
Based in Sweden, Netrounds is conventionally thought of as a network testing and monitoring specialist, although Brendan Gibbs, the vice president of Juniper’s automated WAN business, more colorfully describes it as a sentient hammer that knows exactly where to whack a malfunctioning network.
“How do you figure out what’s wrong and hit it with that proverbial hammer?” said Gibbs in a blog that justified the takeover.
“Service providers need automation to scale, and Netrounds’ solution can provide true insights needed for that,” he continued more prosaically.
It’s an intriguing move partly because Netrounds appears to be so versatile: Juniper says the technology works in various scenarios and spans network and service domains.
It could be used to test a 5G network slice before it is deployed, for instance, or to assess the impact of running a new cloud service at the edge of the network.
Identifying performance problems in a software-defined WAN is a further use case that Juniper cites in its statement on the deal.
The acquisition comes several weeks after Juniper CEO Rami Rahim highlighted growing customer interest in “next-gen cloud-delivered AI-driven solutions” during a call with investors.
“They are really looking at transforming their wireless LAN and WAN solutions,” he said when announcing Juniper’s results for its fiscal second quarter. “That’s true now and it’s certainly true for post-pandemic. And those are the opportunities that we are sort of laser targeting right now and we are seeing some very good success there.”
Juniper’s revenues were down 1% for the first six months of 2020, to just less than $2.1 billion, as growth in switching and security revenues failed to offset a decline at its larger routing business.
By customer group, sales to cloud and enterprise customers were up but there was an 8% drop in revenues at the service provider business, which are generated mainly from routing products.
“We are doing everything we can from our metro portfolio to our 400 gig portfolio to our automation solutions for the wide area network to solutions that span into telco cloud and security to capture that telco opportunity,” said Rahim in July.
Juniper has also warned in a filing with the Securities and Exchange Commission of the need to invest more in software-defined WAN products and shift away from traditional WAN infrastructure.
“If we fail to anticipate market requirements or opportunities or fail to develop and introduce new products, product enhancements or business strategies to meet those requirements or opportunities in a timely manner, it could cause us to lose customers,” said the company.
Simon Leopold, an analyst at Raymond James, welcomed the Netrounds takeover as one that would give Juniper’s customers “an additional layer of diagnostic capability and service assurance.”
“Despite this, Juniper’s service provider business will still likely continue to face secular headwinds in the immediate term, with management previously noting that service provider sales will likely be down mid-single digits year-on-year,” he said in a research note issued today. “Juniper derives around 10% of sales from software, and we anticipate this remains an element of Juniper’s growth strategy.”
Netrounds made telecom headlines last November when it landed a high-profile deal with Rakuten, the Japanese ecommerce firm building a fourth mobile network in Japan.
Tareq Amin, the chief technology officer of the Rakuten Mobile telecom subsidiary, said his business would use Netrounds to boost the “quality of experience” for Rakuten’s customers.
Juniper said in today’s statement that it hopes to complete the takeover of Netrounds by the fourth quarter of this year.
Iain Morris, International Editor, Light Reading