"While we are seeing a move towards integrated offerings with vendors owning compute, storage, and networking, and would not be surprised to see EMC move in this direction at some point, we believe EMC is better off remaining hardware agnostic at this juncture," Passi states.
EMC also "feels like a stretch" to Oppenheimer & Co. Juniper's carrier business "could be out of EMC's comfort zone," writes Oppenheimer analyst Ittai Kidron.
Nonetheless, reports that Juniper's hired a banker "doesn't surprise us given that Juniper has lost focus in its core routing business and has struggled to grow its enterprise business," Kidron states.
A more suitable suitor for Juniper might be Ericsson, he states, given the carrier pedigree, or perhaps even a private equity firm.
Cantor Fitzgerald also doesn't dispute that Juniper may be exploring a potential suitor; but it "strongly disagrees" that EMC is one.
Like Oppenheimer, Cantor analyst Paul Mansky cites a disconnect in EMC's and Juniper's target customers; "cheaper" and better-aligned alternatives in Brocade and Arista Networks; a two-year-old OEM arrangement between EMC and Juniper that "hasn't born fruit" and seen "immaterial levels of traction"; and product execution issues at Juniper.
"To the extent EMC is looking at entering the switching market, it would be centered upon next-generation architectures - flat (single tier) networks, NOT competing head-head in a well-established legacy 3-tier network dominated by Cisco," Mansky states. "Juniper's Q-Fabric offering, its next-generation 'flat network' architecture has ~200 customers after almost two years in the market - and was just the focus of the down-sizing action taken at Juniper; Brocade on the other hand has over 700 customers in the same amount of time."
Citigroup doesn't believe Juniper is shopping itself around at all, according to this Barron's post:
"Simply put, we don't think the set-up is ripe for a company-driven sale: JNPR has major product cycles just kicking in (T4000 core router upgrade, PTX converged transport solution, QFabric data center solution), still-healthy margins (down significantly from 2010 levels, but a still-healthy 15% operating margin last quarter), solid cash flows ($212mln CFO, $124mln FCF last quarter), and healthy balance sheet ($3.4bln cash & ST investment, $2.4bln net cash). We don't see JNPR as a company in distress or facing the existential challenges/risks that would typically motivate a sale."