Juniper Snatches Up SDN Startup Contrail Systems for $176M


Juniper has disclosed its plans to acquire Contrail Systems, a software-defined networking (SDN) startup, for a deal worth around $176 million in cash and stocks. The move was revealed in an SEC filing made by Juniper, followed by a short blog post confirming it. Juniper says that it should close on the deal by the end of this month.

Contrail Systems is expected to pick up around $57.5 million cash, in addition to nearly 6,000 shares in Juniper, a pretty good deal by anyone’s standards, and even more so when you consider that the startup was only founded this year.

“With this acquisition, Juniper gains SDN technology that augments our portfolio of products and services,” said Bob Muglia, Juniper’s software chief.

“As a strategic investor earlier this year, we recognised the inherent advantages of Contrail Systems’ architectural approach and we are excited to take this next step to acquire and combine Contrail Systems into our team.”

For Juniper, the move would seem to be especially timely considering that rival firm Cisco only just announced its own SDN-linked acquisition, buying Cariden for $141 million. In that particular deal however, it’s thought that Cisco were more interested in network virtualization for service providers and being able to deliver carrier apps integrate with its own platforms.

In contrast, the Juniper deal would seem to be more about SDN. Contrail Systems has a few customers testing out its offering, and is aiming to develop a platform that would make it easier for enterprises to manage network virtualization and network-aware apps. To do so, the startup is testing a distributed networking OS, plus something called an orchestration layer that provides support for protocols such as BGP and XMPP. The ideal behind this is that the OS will be able to run alongside pre-deployed software from Juniper and Cisco.

Juniper has been working on software that can address data center traffic patterns for a good while now, and with this deal it’s now getting its hands on a team from Google and Aruba that is already familiar with enterprise customers and the challenges they face in this respect.