Photo: Contrail Systems
On Monday, tiny startup Contrail Systems was in stealth mode. On Tuesday it officially launched. Today, Juniper Networks bought it for $176 million.Contrail’s founders, employees, and investors are sharing $57.5 million in cash and almost 6 million shares of Juniper stock.
Not bad for two days on the market.
Juniper has had its eye on the company for a while. The networking-equipment maker kicked in some of the $10 million Contrail raised in July, in a round led by Khosla Ventures.
Contrail’s first product wasn’t even scheduled to be released until next year, reports Jim Duffy at Network World.
But that product is in the super-hot enterprise market known as software-defined networking, or SDN.
SDN is a new technology that turns enterprise networking on its ear. Instead of buying expensive routers and switches with a lot of fancy features from the likes of Cisco, companies can buy simpler, cheaper hardware—and less of it. This makes networks more flexible and less expensive than they are today.
VMware set this market on fire when it bought the SDN leader, Nicira, for $1.26 billion in July.
Since then, startups that do SDN in some form or another have been the darlings of the tech world. In October, Nicira’s biggest competitor, Big Switch, landed $25 million in financing. (Khosla participated in that one, too.)
Five days ago, Plexxi came out of stealth. It was backed by $48 million in two big rounds, including $20 million this summer.
In August, SDN startup Plumgrid landed $10.7 million.
And those are just a few of the SDN startups pouring out of the woodwork.
Contrail is particularly interesting to Juniper Networks, one of Cisco’s biggest competitors, as it gives Juniper a way to grab Cisco’s customers. Its product was specifically designed in a way that lets it control Cisco’s network equipment as well as Juniper’s.
Its founders previously worked at Google, Cisco, Juniper, and Aruba Networks, and all of them knew Juniper and Cisco’s products intimately.
CEO Ankur Singla was previously the head of engineering at Aruba and worked at Juniper before that. CTO Kireeti Kompella had been a big player at Juniper. Pedro Marques worked at Cisco and Juniper before a stint at Google.
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