NEW YORK (Reuters) - Juniper Networks Inc’s (JNPR.N) chief executive said the network equipment maker is open to acquisitions, although in-house research and partnerships remain its priorities.
Chief Executive Kevin Johnson’s remarks come amid a flurry of industry M&A deals, including bigger rival Cisco Systems Inc’s (CSCO.O) planned acquisition of wireless equipment maker Starent -- a $2.9 billion deal that could hurt Juniper’s position.
They also come as the company on Thursday unveiled product enhancements, such as allowing third-party development on its JUNOS operating system, opening up opportunities for Juniper to forge licensing partnerships and bolster sales.
Johnson said last week that the company’s priority was in research and development, raising concerns among investors who saw acquisitions as a more efficient way to boost its competitive edge in areas like advanced wireless technology.
“We’re open to acquisitions,” Johnson told Reuters in an interview. “Our primary value creation driver is organic R&D. We are an innovation company. Now we will complement that organic R&D with targeted acquisitions.”
Juniper’s shares were up 5.3 percent to $26.39 after the remarks and the product announcement on Thursday, its first day of trading on the New York Stock Exchange after moving from Nasdaq.
Before the rebound, the shares had fallen nearly 13 percent since the company announced quarterly results last Thursday. Analysts had cited concerns that -- without an acquisition -- Juniper might lose out to rivals when phone companies upgrade to next-generation, or 4G, wireless networks.
Johnson said that in looking at potential acquisition targets, Juniper would focus on how they could be integrated with its own technology, namely the JUNOS operating system. Proper integration not only ensures ease of use but also more cost-efficiency for customers, he said.
“As we look at acquisitions, certainly we will consider how to do the technical integration so that we continue to maintain the value proposition, the lowest total cost of ownership in the industry,” he said.
Juniper on Thursday refreshed its JUNOS operating system to allow programing by third-parties. The step opens up opportunities for Juniper to forge licensing partnerships, which it said would provide an additional source of revenue growth.
The company, which is adopting a new logo, also said it is selling new high-speed chipsets for routers designed to support more Internet bandwidth.
Johnson said partnerships will remain a key part of the company’s plans. It has recently signed new sales partnerships for Dell Inc DELL.O and International Business Machines Corp (IBM.N) to sell Juniper’s routing and switching equipment as well as software to their customers.
Such partnerships are seen helping Juniper, whose traditional sales focus is phone service providers like AT&T Inc (T.N), expand sales to the broader business market.
Some analysts have said Juniper’s partnership approach could prove popular with companies who don’t like Cisco’s more proprietary approach. Cisco, with its aggressive acquisitions, is seeking to become an “end to end” provider of its own, broad range of equipment.
“We’re going to continue to invest and develop those relationships,” Johnson said. “We have a vision for the next decade of networking, and that vision is one of an open platform ... We’re opening a set of applications programing interfaces and we’re embracing partnerships.”
Editing by Lincoln Feast and Gerald E. McCormick