October 17, 2012, 8:31 PM — Those layoffs happening at Juniper might be to dress the company up for a sale.
That's some of the speculation swirling inside the company, fueled by reports that Juniper's hired an investment banker to manage bids from potential buyers, and that EMC may be one of them.
DEAL MAKERS: Top tech M&A deals of 2012
Benzinga.com reports that Juniper has hired JP Morgan to handle potential offers for the company. Citing unnamed sources, the site states Juniper's already received an offer in the high $20s per share, and that storage titan EMC has been mentioned as a potential buyer.
Investment firm ISI Group issued a report recently that EMC should take a look at Juniper in order to be a more full-service vendor to cloud service providers, and to move beyond partnerships - such as Cisco - that appear to be fracturing.
Juniper's stock currently trades at $17.28 with 526.6 million shares outstanding. The company's market cap is $9.1 billion.
Juniper and EMC both said they don't comment on "rumor or speculation." But given trends in the industry of data center giants looking to become one-stop IT shops, and recent events that support that trend, it's a plausible scenario.
EMC's VMware unit recently acquired network virtualization startup Nicira for $1.26 billion to fill out the network piece of its holistic cloud strategy, which includes storage, server, network and virtualization. Parent EMC also aligned with server vendor Lenovo which, despite company assurances to the contrary, appears to conflict with an alliance with Cisco for servers.
EMC, VMware and Cisco, along with Intel, have a joint venture called VCE that sells pre-configured data center bundles - EMC storage, VMware virtualization and Cisco servers and switches - to IT shops. How that business has been doing since it was founded in 2010 has been hard to pin down - numerous requests by Network World to speak with CEO Praveen Akkiraju have been unfulfilled by VCE, yet there are reports that VCE is doing $1 billion in annual revenue yet is unprofitable.