Network Instruments' GigaStor, left, and Matrix appliances will become part of JDS Uniphase

Published: December 11th, 2013

JDS Uniphase has remade itself several times after the former Canadian carrier optical networking component giant crashed when the dot-com bubble burst a dozen years ago.

On Wednesday it made another move, this time into enterprise network and application performance management solutions by striking a deal to buy Network Instruments for US$200 million.

Now headquartered in California, JDSU said that if the deal gets regulatory approval it will strengthen the company as a key provider to the enterprise, data centre and cloud networking markets.

The purchase would bring three of Network Instruments’ mail products to JDSU:

–the Observer monitoring platform, including Observer Reporting Server, Observer Infrastructure and Observer performance monitoring software;

–the GigaStor Retrospective Analysis Appliance, which does time-based and retrospective network analysis;

–and the recently launched Matrix Network Monitoring Switch, which combines filtering, de-duplication, packet trimming and outbound traffic routing.

JDSU “is not really an enterprise player,” said Zeus Kerravala, principal analyst at ZK Research. “With the telco business being lumpy this is a good market opportunity for them.”

With new technologies such as network virtualization and software-defined networking (SDN) growing, network management tools will increasingly become important in data centres, he said. In fact, he added, arguably such tools will define the future of such technologies.

JDSU still makes optical components such as modulators and transceivers, but it also makes lasers, network test tools, the PacketPortal cloud network analytics software,  pigments and threads used in the making of currency, and anti-counterfeiting tools for products.

Last month Manitoba Telecom Services (MTS) chose JDSU’s ariesoGEO geolocation platform to help design its 3G and LTE cellular networks.

In October it reported a profit of US$300,000 on revenue of $429 million for the quarter ending Sept. 28. That compared to net revenue of US$420.9 million and a net loss of $11.6 million for the same period in 2012.

It still has a R&D facility in Ottawa.

Privately-held Network Instruments, headquartered in Minneapolis, has about 125 employees and had annual revenue of approximately $40 million. It opened a Toronto office in 2005.

Canadian customers have included Rogers Communications, SaskTel and SAIC Canada.

There was no word in the announcement of the future of NI co-founder and CEO Douglas Smith.

But in a statement he said that being bought by JDSU “will provide our customers with considerable benefits. JDSU’s commitment to product innovation and its leadership position with service providers will provide Network Instruments with a strong entry into the carrier market for performance management solutions.  In turn, our robust product line and strong relationships with our enterprise channel partners will benefit JDSU as we bring our products under the JDSU brand.”

JDSU [TSX: JDU] and Network Instruments offer highly complementary product portfolios, the two companies said. “As enterprise and carrier network performance management requirements converge, driven by an ever-increasing number of connected mobile devices and the need for improved visibility into application performance, JDSU and Network Instruments are uniquely qualified to create new and differentiated solutions for both markets.”

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