UPDATE 2-Juniper, IBM in talks to boost sales tie-up-sources
* Juniper, IBM in talks for OEM deal
* Sources say agreement not imminent, may be months away
* Juniper shares up 3.1 pct (Adds share move, background, byline)
By Ritsuko Ando
NEW YORK, May 28 (Reuters) - Network equipment maker Juniper Networks Inc JNPR.O and IBM (IBM.N) are in talks to step up their sales partnership, but no agreement is imminent, sources familiar with the situation said on Thursday.
The companies are considering an OEM (original equipment manufacturer) deal, in which International Business Machines Corp would resell Juniper equipment as part of its own family of products, said the sources, who requested anonymity because the talks are still ongoing.
Juniper shares rose 3.1 percent, outperforming a 1.2 percent gain on the Nasdaq as investors bet an OEM deal with IBM could help the company gain market share from bigger rival Cisco Systems Inc (CSCO.O).
Officials at both companies declined to comment.
The sources said no decision has yet been made and any announcement could be months away.
Computer server and hardware maker IBM already helps sell Juniper products such as routers, which direct Internet traffic, under the same kind of sales partnership it has with Cisco and other equipment vendors.
Analysts say an OEM deal would provide further incentive for IBM's salesmen to promote Juniper gear to their mutual customers, and underscore IBM's efforts to cultivate sales relationships beyond equipment industry leader Cisco.
Cisco recently announced it was entering the computer server market, bringing it into direct competition with IBM as well as Hewlett-Packard Co (HPQ.N). Analysts have said IBM could retaliate by shifting its ties to other equipment vendors.
IBM has already announced an OEM deal with Brocade Communications Systems Inc (BRCD.O), which makes data storage and other network equipment and is also a Cisco rival.
Avian Securities said in a research report last week that it expects IBM to forge an OEM deal with Juniper and that it was evident the company was shifting resources away from Cisco.
IBM shares rose 1.71 percent to $104.69, while Cisco shares rose 1.59 percent to $18.51. (Reporting by Ritsuko Ando; editing by Carol Bishopric and Derek Caney)
