Juniper reaches out from the core
Router power acquires cable start-up to offer service-rich edge systems.
 
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Juniper Networks' announcement last week that it will acquire a small cable modem termination system company indicates a desire to bolster its presence at the service-enabling edge of the IP network while the core is undergoing a bit of capacity indigestion.
Juniper said it plans to acquire Pacific Broadband Communications (PBC), a maker of CMTS headend equipment for MSOs, for $200 million in stock. PBC's CMTS system, Juniper says, will enable MSOs to deliver IP services such as voice over IP, cable modem Internet access, DVD-quality streaming video and business service-level agreements over the last-mile cable infrastructure.
It will enable Juniper meanwhile, to sell more routers into the edge to enable multiple, differentiated IP services over the cable infrastructure while business in the core softens due to capacity absorption. Revenue opportunities at the edge, where the number of routers vastly outnumbers those in the core, are richer anyway - Cisco in the past has said that edge revenue is 15:1 that of the core.
"This is another step in reaching out form the core to add reliability, performance and intelligence to the expanding markets surrounding the backbone," Juniper CEO Scott Kriens said in explaining the rationale behind the PBC buy. You can add $$$ to that, too.
The CMTS market will be $500 million this year, growing to $1.3 billion in 2005, Kriens says, citing data form Gartner Group/Dataquest. Meanwhile, the edge router market will only grow to $2.75 billion in 2005 from $2 billion this year, according to Juniper Chief Financial Officer Marcel Gani, citing Dell'Oro Group numbers at a UBS Warburg conference in New York last week.
Juniper wants to hitch its edge routers to a market that's going to triple in four years rather than stay in one that will "only" grow 38%.
Competition will be fierce, however. PBC's Kodiak CMTS isn't even in trials yet and is only DOCSIS 1.0-compliant. Cisco, meanwhile, has been in the IP CMTS market since 1997. Motorola acquired RiverDelta earlier this year.
"Juniper has no established track record in successfully integrating a new hardware product line such as the PBC CMTS technology into its own portfolio," market research firm Current Analysis says in a recent report. "As a result, established CMTS rivals such as Cisco, Motorola, Terayon, Arris and ADC will challenge Juniper's ability to smoothly execute such integration. Likewise, CMTS rivals with in-house voice expertise such as Motorola, Cisco and Arris will challenge Juniper's ability to fulfill the strategic voice needs of cable operators, since Juniper lacks its own in-house voice technology in areas such as voice-over-IP gateways and softswitches."
Juniper will announce general availability of its IP CMTS at a later date, Kriens says.
RELATED LINKS
Juniper jumps into broadband
Network World, 11/15/01
Motorola to buy RiverDelta for $300 million
The Edge, 07/03/01
Cisco unveils entry in cable data race
Network World, 12/05/97
