Juniperhas announced its plan 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. Cisco spent $141 million a company called Cariden, which was more about network virtualization for service provider customers and delivering carrier apps on top of its platform.
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 existing Cisco and Juniper gear already deployed in the enterprise.
Juniper has done a lot of work building out software that addresses the changing traffic patterns in the data center and with this deal gets a team that came from Aruba and Google that is well aware of the challenges that enterprise customers who want the advantages of SDN deployments without hiring a team of specialized network engineers and replacing all their gear. As the 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, WMware and Juniper who want to make sure the market goes their way, are getting aggressive when it comes to claiming their turf.