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When Acquisitions Lead to Uncertainty

by Juniper Employee on ‎04-24-2017 08:00 AM

In the high-tech vendor world, oftentimes acquisitions can be exciting for customers. When related technologies come together, it can create unique opportunities to blend products, simplify procurement, and collapse support and services contracts under a single supplier. But when assets are sold under duress, the outcomes can be more uncertain.

 

Broadcom acquires Brocade, then sells to Extreme.

 

As most of you know, Broadcom entered into an agreement to purchase Brocade for $5.9B. And just a few weeks ago, Broadcom has announced that it has reached a deal to sell Brocade’s data center routing and switching business to Extreme for $55M.

 

Extreme’s buying spree. 

 

Extreme has actually been on a bit of a buying spree lately. In early March, they announced their intent to acquire part of Avaya’s troubled business for $100M. And, shortly before that, Extreme agreed to purchase Zebra’s WLAN business for $55M. And now they’re buying Brocade’s data center business, which includes the Foundry assets that were acquired for $3B in 2008. The fact that the deal also includes subsequent Vistapoint and StackStorm acquisitions, all at less than 2% of the original Foundry price, suggests that this was a sale under duress, as well.

 

How will Extreme integrate three acquisitions at once? Extreme’s business strategy here is interesting. They appear to be trying to push their revenue up over the $1B threshold after having hovered just over $500M the last couple of years (and down year-over-year).

 

More interestingly, Extreme has not been profitable since 2013. Having hit an EPS low of $-0.72 in 2015, they have begun to rebound ($-0.31 in 2016 and $-0.14 so far in 2017).

 

While the revenue should help drive top-line results, it’s hard to see how they will manage EPS to become a more profitable business. It seems at least plausible, if not likely, that Extreme will need to right-size the acquired teams to fit their profitability models and continue their march towards positive EPS.

 

When is a roadmap not really a roadmap?

 

If the development teams are impacted by any right-sizing, the question for many former and current Brocade customers is this: has the roadmap shifted from promise to compromise?

                         

At best, managing a trio of complex integrations is extremely complicated. More likely, I suspect, the teams lose focus, and the roadmap changes. At worst, retention becomes difficult and entire product plans have to be re-evaluated for what’s possible under new operating conditions. 

 

This kind of disruption hits at a particularly difficult time for Brocade customers. Many had bought into a proprietary layer-2 fabric built using ASICs designed by the SAN team (which is still a part of Broadcom). The next-generation platforms had already moved from layer-2 fabric to layer-3 fabric, leaving the upgrade path from their flagship VDX products in question. Tougher still, the next generation of products are new hardware platforms featuring new merchant silicon running a new operating system. 

 

This transition could be particularly painful for customers. Stabilizing new platforms is difficult when changing only one major component. Changing three and then transferring ownership while right-sizing the business?  

 

Juniper Networks as an alternative. 

 

Juniper has always challenged the status quo from its founding. Our mission is to help our customers grow and reap the rewards of IT agility, a mission that becomes more important every day with the rise of the cloud and the disruption that everything digital brings. We believe wholly in our mission, and we are committed to helping customers navigate uncertain times. We are uniquely positioned to help companies work through changes in their own operating scale, changes in technology, and even changes in their vendors.

 

Built on a carrier-grade operating system, running on the highest-performing platforms on the planet, our solutions are proven worldwide. We have designed our solutions with automation in mind. And we have built a robust services and support organization that can help drive migrations.  

 

If companies find themselves in uncertain times, they are likely best served by falling back to certain strength. Here’s how to ensure your networking infrastructure is prepared for whatever comes next.

 

 

 

 

 

 

 

 

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  • Prior to Juniper acquisition, Ankur was the Founder and CEO of Contrail Systems Inc - a pioneer in standards based network virtualization and scale-out networking software. Ankur has over 15 years of experience in building world-class networking products and leading high performance teams. Prior to Contrail, Ankur served as Chief Technology Officer and VP of Engineering at Aruba Networks, where he played critical roles in the rapid expansion of team, products, and global businesses. Before Aruba, Ankur helped drive Juniper’s initial entry into and expansion of the Ethernet Switching market. Ankur received his MSEE from Stanford University & BSEE from the University of Southern California.
  • I am an experienced leader in the Information Experience (iX) industry. For over 20 years, I've led information organizations at Juniper, Microsoft, Cisco, and Oracle to deliver quality technical documentation and information products to customers and partners across the globe.
  • Bob Dix currently serves as the Vice President of Government Affairs & Critical Infrastructure Protection for Juniper Networks. During his career, he has served in senior leadership roles in industry and government, including serving as Staff Director for the House Government Reform Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census during the 108th Congress. He represents Juniper on the Industry Executive Point of Contact for the President's National Security Telecommunications Advisory Committee ( NSTAC ), where he chaired the Cybersecurity Collaboration Task Force in 2009. He served as Chair of the Information Technology Sector Coordinating Council ( IT SCC ) from 2008 – 2010 and currently remains a member of the Executive Committee. Mr. Dix was elected in May, 2011 as Chair of the Partnership for Critical Infrastructure Security ( PCIS ). He also serves on the National Security Task Force for the U. S. Chamber of Commerce. He is a member of the AFCEA Cyber Security Committee and Chairs the Supply Chain Assurance Subcommittee for TechAmerica. Additionally, Dix has actively worked to insure and coordinate private sector participation and collaboration with the National Exercise Program, intended to test our nation’s preparedness and resiliency. He served as Chair of the National Private Sector Working Group for National Level Exercise 2011 and 2010. In 2007 and 2009, Dix was honored with a prestigious Federal 100 Award, and was recognized in March, 2010 as the recipient of the annual FCW Industry Eagle Award. Dix also served as a local government elected official in Northern Virginia for 12 years and in his spare time coaches AAU/Travel girls basketball.
  • Jennifer Blatnik is vice president of cloud, security and enterprise portfolio marketing at Juniper Networks with focus on enterprise deployments of security, routing, switching, and SDN products, as well as cloud solutions. She has more than 20 years of experience helping enterprises solve network security challenges. Before joining Juniper, Jennifer served multiple roles at Cisco Systems, Inc., including directing product management for security technologies aimed at small to medium enterprises, as well as supporting managed services, cloud service architectures and go-to-market strategies. She holds a B.A. in Computer Science from University of California, Berkeley.
  • Jerry oversees all aspects of OpenLab which serves as a catalyst to spark the development of new innovative software applications or solutions that leverage the power of SDN/network programmability and intelligence. OpenLab is unique within Juniper and with its polished facility, globally accessible lab, and educational programs – such as the SDN “hackathons,” it serves as a tool for customer, partners, and academia. Prior to this position, Jerry led the development, management and marketing of the company’s strategic partnerships for video/unified communications, optical networking, and content/media delivery. In addition to handling the day-to-day oversight of the partnerships, he established new cross-partner go-to-market processes to drive and manage joint field opportunities. Before joining Juniper, Jerry led the Lucent Technologies application hosting/service provider marketing organization. He has over 25 years of experience in the data networking field with a focus on strategic alliance development, marketing, and technical field support. Jerry possesses a BS degree in Computer Science from St. John’s University in New York. He is active as a Juniper ambassador within the technology and academic community which includes advisory board positions with both NJIT and Rutgers in New Jersey.
  • Jonathan Davidson is executive vice president and general manager, Juniper Development and Innovation (JDI). In this role, he is responsible for driving strategy, development, and business growth for Juniper's entire portfolio including routing, switching, and security, as well as for the ongoing evolution of silicon technology and the Junos operating system. Prior to his current position, Davidson was senior vice president and general manager for Juniper’s Security, Switching and Solutions Business Unit (S3BU). In this role, he was responsible for leading innovation, growth and product development in data center, campus, branch, and cloud. Davidson joined Juniper in 2010 as vice president, Product Line Management for the Edge and Aggregation Business Unit where he was responsible for the product lifecycle management, strategy, implementation, solutions and go-to-market activity for a range of leading edge routing product families, such as the E, M and MX Series. Before joining Juniper, Davidson had a 15-year career in various leadership positions at Cisco.
  • Kevin Walker is the Security Chief Technology and Strategy Officer for Juniper’s Development and Innovation (JDI) organization. He is responsible for driving the security strategy both internally within Juniper, and externally with investors, partners, influencers, and customers. He provides the guidance required for JDI to conceive, develop and create momentum for industry-leading security solutions. Working closely with the Security Engineering team, Walker identifies the opportunities for improved security, growth, and innovation to deliver the scalable, reliable, and compliant security architecture needed in today’s security landscape. Before joining Juniper, Walker was VP and Assistant Chief Information Security Officer (CISO) at Walmart.com. He has served as a Chief Information Security Officer (CISO), Chief Security Strategist and Director of Information Security across a number of notable companies including Intuit, Cisco, Symantec and VERITAS Software. With over twenty-five years in various computer science and information technology disciplines, focusing on enterprise applications, network design, and information security, Walker possesses research and engineering expertise across of range of technologies including networking protocols, securing applications at the atomic level, cryptography, and speech biometrics.
  • Masum Mir is Vice President of Product, Solutions & Technical Marketing at Juniper Networks. Masum is responsible for the Switching product line, network management product line and optical technologies. Beside product leadership Masum also leads cloud strategy and solution architecture. Masum has 19 years of experience in communication and data networking industry with Expertise in Ethernet Switching, Data Center, Carrier Ethernet, Routing, overlay & network segmentation, Fabric technology & photonics technology.
  • Mike Marcellin is Senior Vice President and Chief Marketing Officer, leading the global marketing team responsible for marketing Juniper’s product and services portfolio and stewarding the brand, driving preference for Juniper in the market, training our partners and account teams, and developing a differentiated information experience for our customers. Before joining the global marketing organization, Marcellin led business strategy and marketing for Juniper’s industry-leading portfolio of high-performance routing, switching and security products. Prior to joining Juniper in 2010, Marcellin served as Vice President of Global Managed Solutions for Verizon, where he oversaw product development and marketing of its managed IP networking, hosting, security and IT solutions for businesses around the world. He also served as Vice President of Global Product Marketing for Verizon Business, executive director of Verizon Business’ IP and Ethernet portfolio as well as leading the company’s eCRM marketing division. Marcellin began his career with MCI in 1994. Marcellin is a Board Member for the Telecommunications Industry Association and a Board Member of US Ignite, an NSF-sponsored initiative. Marcellin holds two patents and was a Rodman Scholar at the University of Virginia, where he received a bachelor of science degree with distinction in systems engineering. He is based in Sunnyvale, California.
  • Paul Obsitnik is Vice President of Service Provider Marketing for Juniper Networks Platform Systems Division (PSD), responsible for the marketing of Juniper’s portfolio of high performance routing, switching, and data center fabric products to Service Providers globally. Paul's team is responsible for marketing strategy, product marketing, go-to-market planning, and competitive analysis worldwide for the Service Provider segment. Obsitnik has extensive experience in marketing, sales and business development positions with a proven track record in creating technology markets. He has served in senior marketing and sales management positions at several companies including BridgeWave Communications, ONI Systems, NorthPoint Communications and 3Com. Paul holds a Bachelor of Science with Honors in Electrical Engineering from the United States Naval Academy and a Master of Business Administration from the Harvard Graduate School of Business. Obsitnik is based in Sunnyvale, California.
  • Pradeep Sindhu founded Juniper Networks in February 1996, and has held several central roles in shaping the company. He currently serves as Vice Chairman of the Board and Chief Technology Officer, and is responsible for the company's technical roadmap as well as day-to-day design and development of future products. He served as Chairman and Chief Executive Officer for eight months when he founded the company. During that time, he played a central role in the architecture, design, and development of the M40 router.
  • Rami Rahim is Chief Executive Officer of Juniper Networks and a member of the company’s Board of Directors. Rahim was appointed CEO in November 2014. Rahim began his Juniper career in early 1997, as employee No. 32, and worked as an engineer on Juniper’s first breakthrough product, the M40 core router. Rahim has progressed through a series of technical and leadership roles at Juniper, applying his engineering acumen to the design and development of Juniper’s industry-leading product portfolio. He most recently served as Executive Vice President and General Manager of the Juniper Development and Innovation (JDI) organization, overseeing the company’s entire product and technology portfolio. His responsibilities included driving strategy, development and business growth for routing, switching, security, silicon technology, and the Junos operating system. Other leadership positions held over the years include: Executive Vice President and General Manager of Platform Systems Division for routing and switching, Senior Vice President of the Edge and Aggregation Business Unit (EABU), and Vice President and General Manager of EABU.
  • As Chief Customer Officer, Vince Molinaro is responsible for driving the strategic and operational elements of the Sales, Marketing, Partners, Services and Support functions at Juniper Networks. He leads a global organization of more than 3,500 professionals that includes direct and indirect sales, systems engineering, advanced technologies and field operations. Molinaro brings more than 25 years of professional experience in engineering, product management, marketing, sales and operations to his worldwide role. He joined Juniper in 2009 and led the strategy and go-to-market execution for the company’s global service provider business. He was named EVP, Worldwide Sales in 2013 before assuming his current role in February 2014. Prior to joining Juniper, Molinaro held senior leadership positions at a number of technology companies including Bell Laboratories, Lucent Technologies, Alcatel-Lucent and Internap Network Services. He has extensive domestic and international experience having lived and managed large organizations throughout Europe and the U.S. Molinaro holds a bachelor of science degree in biomedical engineering from Boston University and a master of science degree in electrical engineering from University of Bridgeport. He is based out of the Juniper Networks facility in New Jersey, home of OpenLab, The Junos and SDN Center for Innovation.
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