Juniper Networks to Acquire SDN Company Contrail Systems for $176M

Juniper Networks (News - Alert) is going to acquire software defined networking (SDN) company Contrail Systems for $176 million in stock and cash, according to news reports.

“We’ve entered into an agreement to acquire Contrail Systems, a Santa Clara, California-based software networking startup founded in early 2012,”  Bob Muglia, executive vice president of software at Juniper Networks, announced in a recent blog post.

“With this acquisition, Juniper gains SDN technology that augments our portfolio of products and services,” Muglia added. “As a strategic investor earlier this year, we recognized the inherent advantages of Contrail Systems’ architectural approach and we are excited to take this next step to acquire and combine Contrail Systems into our team.”

The deal is expected to close by the end of the year.

The deal comes shortly after Cisco (News - Alert) announced it was acquiring another SDN company, Cariden Technologies, some two weeks ago for $141 million. That deal should be completed in Q2 of 2013. Cariden Technologies offers design, network planning and traffic management solutions for telecom platform deployment scenarios, according to TMCnet.

In an earlier SDN deal this year, VMware acquired Nicira.

Ovum (News - Alert) has praised the SDN market in a recent report. In addition, it was argued that SDN “could be a threat to traditional routing and switching equipment sales by Juniper and Cisco Systems (News - Alert) (CSCO) and other box makers,” according to a report from Barron’s.

"With SDN the focus of networking has moved from the feeds and speeds of the data plane to the intelligence inherent in the control plane and related network services," Ovum analyst David Krozier was quoted by ZDNet. "Instead of crafting applications to operate within the constraints of the network, with SDN the network will dynamically adapt to provide the connectivity services that best serve the application."

Still, it is "too early in the evolution of SDN to draw conclusions about which approach will win or the exact architecture of future networks as there is too much innovation yet to happen, and vendors and their customers have yet to reach a common agenda,” Krozier added.

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