A few commentators have opined that Juniper’s recently announced acquisition of Ankeena Networks was a me-too play, a means for the company to catch up with Cisco Systems in video-delivery infrastructure for mobile and wireline networks.
There’s an element of truth to that assessment, but that’s why I like the deal, said to be valued at less than $100 million. This wasn’t a speculative, damn-the-torpedos, high-risk acquisition, pursued by a vainglorious executive team intoxicated by delusions of grandeur.
To the contrary, this deal fills an identifiable gap in Juniper’s solution portfolio, provides software-based value that enhances the JUNOS profile, and responds to actual customer requirements relating to cost-effective, reliable, scalable, and high-quality video delivery. What’s more, the companies had a prior JUNOS-based technology partnership, giving Juniper added confidence that the deal would work.
Finally, the price was right. Juniper could derive considerable long-term benefits from ownership of Ankeena’s video-delivery software, and the price it’s paying for that opportunity is not prohibitive. The downside to the deal, presuming post-acquisition integration sputters and Juniper fails to leverage what Ankeena offers, is not debilitating, though Juniper is motivated to make this deal work.
This transaction looks like a tuck-in acquisition for Juniper. Risks have been mitigated, and the upside is promising.