Networking gear maker Juniper Networks Inc. on Monday announced a US$4-billion agreement to acquire NetScreen Technologies Inc., a network security company.
The Sunnyvale, Calif.-based company said it is offering a stock-for-stock merger transition for NetScreen common stock. NetScreen, also based in Sunnyvale, Calif., will combine its 900 employees with Juniper’s 1,600 in a new security group products group.
The merger will see the continued delivery of the full product line of both companies, said Scott Kriens, Juniper CEO in a conference call. He also said the merger will better serve its customers by addressing network security concerns. NetScreen’s security products, including firewalls and virtual private network technology, will join Juniper’s high-end network products.
“Juniper will continue to leverage the security capabilities of NetScreen, the networking systems of Juniper and the customer opportunities of both companies to bring a level of integrated network security solutions on the market, providing a suite of products and services,” Kriens said.
Since both companies address similar needs for mission-critical networks, Kriens explained that the merger was a natural progression for both Juniper and NetScreen.
Kriens said the companies will join their technologies into suites of products that combine core IP routing with security and policy management features, but that as part of Juniper, NetScreen would continue expanding its security offerings and focus on solving complex network security problems.
The merger is evidence of a shift in the market for networking equipment produced by the string of major Internet worm outbreaks in recent months, said Richard Stiennon, research director for network security at Gartner Inc.
“For the longest time, networks were about being wide open to everything — using any ports and any protocols,” Stiennon said. “Thanks to worms and hackers, however, the Internet is being locked down to allow a lot less access, which is more akin to what firewalls do than what routers do.”
In that light, a merger between a leading routing vendor and a network security vendor makes sense, he said.
Dividing the networking market into three specific areas, with devices on one end, transport facilities on the other and packet handling in the middle, Kriens said the packet handling is the market opportunity for the newly merged company.
“We are both the best in the world at different, but critical elements of packet handing,” Kriens said. “Combined we will secure and deliver the packets for the transport infrastructure that connects us all together.”
– With files from IDG News Service