5/2/2005 -- Over the years, Cisco Systems Inc. has garnered a reputation for playing fast and loose—with its purse strings, that is. After all, Cisco has acquired dozens of companies, including more than a half dozen in the last 18 months alone.

With this in mind, the message last week from Cisco rival Juniper Networks Inc. seemed unmistakable: two can play at that game. Juniper announced a pair of acquisitions, snapping up Peribit Networks, a provider of WAN optimization technologies, and Redline Networks, an application delivery technology specialist, for more than $450 million combined.

Analysts say Juniper’s two-fer is game-changing in several ways. “These two acquisitions are a bold move to reshape the enterprise networking industry and signal Juniper's intentions to address the full scope of application optimization requirements,” write Gartner analysts Mark Fabbi and Joe Skorupa. “This will lead to further market consolidation as competitors are forced to respond to Juniper's initiative. Promising startups that have not achieved critical mass in the market will be the primary targets of acquisition efforts.”

So, just what will Peribit and Redline do for Juniper, and why should Cisco, among others, sit up and pay attention? According to Gartner, the application acceleration segment was roughly a $1 billion market in 2004 and should post 40 percent year-over-year growth. “The acquisitions give Juniper a major position in this market. More important, they provide Juniper with all the ingredients for significant differentiation over Cisco Systems in the enterprise market,” Fabbi and Skorupa write. “Juniper's ... [VPN] technology and J-, E- and M-series edge routers, combined with Peribit's WAN optimization and Redline's application delivery components, will allow Juniper to deliver a robust WAN architecture that will improve end-user performance by two to 10 times when compared with Cisco.”

Of course, the Gartner duo don’t exactly consider the acquisitions a slam dunk for Juniper. Unlike enterprise behemoth Cisco, for example, “Juniper has not been able to develop the marketing, sales and channels to deeply penetrate the enterprise market. Its enterprise products are spread across two divisions with two separate management and development teams.”

There’s another consideration, too. Integrating heterogeneous technology is the hairiest aspect of any acquisition-type scenario, and in this case, Fabbi and Skorupa note, Juniper will have two such technology platforms to integrate. -Stephen Swoyer