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Juniper buys Netscreen for $3.4 billion

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Juniper Networks has decided to dive into the low-end of the networking market with a $3.4 billion buy of security hardware maker NetScreen Technologies.

With its proposed purchase, Juniper has signaled that is ready to sell lower-cost networking products for the corporate market alongside its high-end gear typically aimed at telcos and service providers. The deal should help Juniper tap into the growing market for network security gear but will also put it in direct competition with giant Cisco Systems.

The deal is expected to close in the second quarter if standard approval procedures are met.

Networking companies have been punished by slow sales to the telco and service provider segment, prompting some of the companies to diversify. Cisco, for example, started to build out storage and security networking products a couple of years back.

But while Cisco is strong in most areas of the networking market, NetScreen has managed to carve out a nice niche in the VPN and firewall market, selling relatively high-end gear to corporate customers. Juniper will be fighting with Cisco and leader CheckPoint for sales there. ®

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