MPLS Provider Juniper Networks Buys Contrail Systems in Nine Figure Deal

By Steve Anderson, Contributing TMCnet Writer

Recently, Juniper Networks (News - Alert) made a major play that not only means a big move in the multi protocol label switching (MPLS) sector, but also is clear evidence of a sea change in business as a whole. Juniper Networks bought software defined networking (SDN) firm Contrail Systems in a nine figure deal before Contrail Systems could even get its software lineup ready.

The Juniper Networks deal was valued at $176 million and gave the company a bit of a second wind in the hardware business. Juniper Networks was actually beset on all sides by the competition; while a revived Cisco (News - Alert) Systems was taking it to task in hardware and the growth of the virtualization market was doing a number on Juniper Networks' operations. For a lesser company, it might well have spelled the end of operations entirely. But Juniper Networks wasn't taking the multi-sided competition lying down, thus making its move to acquire Contrail Systems.

Contrail Systems, for its part, had only gotten started recently. It was founded in early 2012, but still managed to have sufficient potential that Khosla Ventures got in on a Series A funding drive for Contrail Systems that yielded $10 million for the company. Although, at least some of that might have been due to larger industry developments like the purchase of Nicira by VMware, who shelled out nearly $1.26 billion to make that deal happen.

Had Contrail Systems carried on, it was set to come out of what's known as "stealth mode" December 13 and shown off its developments in a more public fashion. But instead, Juniper Networks stepped in and made Contrail Systems' operations part of their own, and giving them that means to take back a share of the market that might otherwise have been lost. Considering that Contrail Systems' CTO, Kireeti Kompella was the CTO and chief architect at Juniper Networks, that may well have put a little more impetus into the deal.

Still, whether it was a chance to work with familiar faces, a chance to get some lost market share back, or just a chance to build presence in a steadily growing field, it's clear that MPLS as a whole is increasingly vital to businesses' operations. When compared against a variety of different solutions, it's clear that MPLS will offer what IPSec VPNs and frame relay systems will simply never be able to offer. Additionally MPLS solutions, especially those offered by UNSI, can offer features like IPSec or SSL VPN remote access, built-in security gateways and seamless failover options with lower total ownership costs than the alternatives in the market.

The long-term ramifications of Juniper Networks' purchase of Contrail Systems remain to be seen, but it's clear that Juniper Networks is taking the MPLS market very seriously and is obviously out to improve its own offerings to make it a better value for customers overall.

To find out more about UNSi visit the company at ITEXPO Miami 2013. Taking place Jan. 29- Feb 1, in Miami, Florida, be sure to visit UNSi in booth #923 and #925. For more information on ITEXPO (News - Alert) Miami 2013, click here.