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Juniper snaps up SDN startup before it even uncloaks

Contrail Systems fetches $176m

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Struggling switch and router supplier Juniper Networks, smacked around in the hardware business by a recovering Cisco Systems and surrounded by a bunch of upstarts who want to virtualize networks and thereby suck all the profits out of hardware, is fighting back by acquiring Contrail Systems.

Contrail, which was working on its own riff on software-defined networks, was founded in early 2012 and bagged $10m in Series A funding from Khosla Ventures back in July in the immediate wake of server virtualization juggernaut VMware forking over $1.26bn to acquire similarly uncloaked SND startup Nicira.

Contrail joins Nicira, Big Switch Networks, IBM, Hewlett-Packard, Vyatta, Pica8, and a slew of others who are moving into the SDN arena from various vectors. Or rather, it was about to do so when it was expected to come out of stealth mode on December 13.

Not much is known about Contrail, but ahead of the uncloaking and in preparation for a briefing set for tomorrow, the company contacted El Reg and said that Contrail had put together a team of networking and software platform experts from Google, Juniper, Cisco, and Aruba Networks, and have particular expertise in Layer 3 virtual private networking and multiprotocol label switching (MPLS) for telecom networks.

The company said it was working on an "open, standards-based software solution" and added that its approach "contrasts sharply with other 'academic' SDN solutions that are not enterprise ready, do not scale, or work only with specific hypervisors."

In an 8K filing with the Securities and Exchange Commission, Juniper said that it entered into an agreement to buy Contrail on December 7 with a mix of cash and stock that added up to $176m; $57.5m of that was cash and Juniper is issuing 5.82 million of its shares to fill in the remaining value of the deal. The filing also said that Juniper had kicked in money to Contrail earlier this year.

"As a strategic investor earlier this year, we recognized the inherent advantages of Contrail's architectural approach and we are excited to take this next step to acquire and combine Contrail into our team," the Junipers short statement read.

It is also just as likely that Juniper wanted to get Kireeti Kompella, formerly CTO and Chief Architect at Juniper before he left to be CTO at Contrail, back on board. ®

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