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Juniper Networks on Tuesday announced plans to acquire Peribit Networks and Redline Networks, two startups in the emerging field of application acceleration technologies.
The two purchases, which total about a half-billion dollars, give Juniper more weapons to compete against router kingpin Cisco Systems for enterprise IT customers. Wide-area optimization technology like Peribit's and application-acceleration hardware like Redline's are being used to speed performance of enterprise applications, especially when they are being accessed via remote connections. Overall, the application acceleration market was worth $1 billion in 2004, according to analysts at Gartner.
"Juniper's traffic processing strategy took a giant leap forward today," said Juniper CEO Scott Kriens, in a conference call Tuesday afternoon. According to Kriens, the need for application acceleration technologies has grown significantly over the past few years, as large corporate applications are distributed widely across uncertain networking links.
"Most of today's applications were written years ago for a local user," Kriens said. "That user has left the building."
Networks built on infrastructure from companies like Juniper, Kriens said, need to become more aware of applications' needs to deliver performance users have come to expect on local-area networks.
"It isn't just [something] nice to have," Kriens said. "It's a basic necessity."
According to Juniper, Peribit will be acquired for $337 million in a mix of cash, stock and assumed stock options. Redline, Juniper said, will be acquired for approximately $132 million in both cash and assumed stock options.
Peribit CEO Jef Graham will join Juniper to head a new division, reporting to Kriens. Redline CEO Roy Johnson will also join Juniper, working in the same new division, reporting to Graham. According to Kriens, Johnson had previously worked for Graham, when both were at networking vendor 3Com.
Since both Redline and Peribit have exisiting customer lists, Juniper at the very least will acquire clients in the enterprise market, a segment it has had difficulties cracking, even after its purchase last year of security specialist NetScreen Technologies.
"We're extremely excited about this space," said Kriens. About timing the acquisitions together, Kriens said Juniper "wanted to make a powerful statement about what's needed."