October 18, 2012, 8:42 PM — Wall Street doesn't doubt that Juniper Networks is in play, but does doubt EMC's interest in the company.
Several investment firms issued bulletins following Network World's story that Juniper may be downsizing for a potential sale, that it has hired an investment banking firm to evaluate bids for the company, and that EMC may be one of the companies making an offer. The story cited Benzinga.com, a recent report from investment firm ISI Group, and internal contacts as its sources.
FABRIC WARS: Cisco vs. Brocade vs. Juniper
Many bulletins stated that Juniper may indeed be prepared to entertain offers due to recent product challenges, but most also doubted that EMC would consider acquiring the company.
"Given recent execution challenges at Juniper, we don't doubt that it may be contemplating a sale," writes Amitabh Passi of UBS. "However, we remain skeptical of an EMC-Juniper tie-up especially given Juniper's struggles in enterprise switching (including data center fabrics) and security, and the recent VMWare/Nicira tie-up."
The rationale for EMC's purported interest in Juniper would be to become a single source of integrated, fabric-woven storage, servers, networking and virtualization to IT shops. Juniper would replace Cisco as EMC's network infrastructure provider given an apparent rift in the EMC/VMware/Cisco joint venture.
But UBS sees Brocade a better fit for EMC, due to its lower valuation and enterprise synergies: Brocade is a SAN leader, and boasts more than three times the number of data center switching customers as Juniper, which derives 65% of its revenue from service providers. At the same time, UBS doesn't see EMC becoming infrastructure-dependent anytime soon.