Partners: Juniper's Acquisition Of BTI Will Bring Welcome Boost For Software Sales

Partners say Juniper Networks is striving to boost its software sales in 2016 with the acquisition of software networking specialist BTI Systems unveiled Tuesday.

"Juniper wants to get to 30 percent of its revenues derived from software sales within five years, and this is obviously going to help that effort," said Chris Becerra, president and CEO of Terrapin Systems, a San Jose, Calif.-based solution provider and longtime Juniper partner. "They do have to get more software-based sales and they need a team that can come in there that has sold software from Day 1, and that's one of the challenges with Juniper. ... Historically, they're a hardware business and they're set up to sell as a hardware business, and you really have to change your sales force thinking to think about software sales."

Ottawa, Ontario-based BTI Systems provides cloud and software defined networking (SDN) solutions to content, cloud and service providers.

[Related: Juniper Networks Reveals 5 New Enhancements To Its Partner Program In 2016]

Financial terms of the deal were not disclosed.

During Juniper's Ideas/Connected partner event this month, partners said Juniper CEO Rami Rahim told solution providers that the Sunnyvale, Calif.-based networking vendor hopes to increase its software sales from representing less than 10 percent of overall revenue today to 30 percent within five years.

"They can't get to 30 percent on their own, so they have to acquire companies to get to that 30 percent," said Becerra. "This specific acquisition looks more to enhance their service provider play, but maybe there's an enterprise play as well and it does include cloud providers."

Juniper unveiled its last acquisition more than two years ago with its plan to acquire Wide Area Network Design Laboratory (WANDL) for $60 million.

"I think they need to do a similar [acquisition] with a company that's more targeted toward the enterprise software sales -- maybe some monitoring or a software analytics play that is catered toward the enterprise," Becerra said.

The acquisition will also boost the networking vendor comeback in the U.S. service provider market, according to Reno, Nev.-based market researcher Synergy Research Group.

For the third quarter of 2015, Juniper's U.S. service provider routing market share rose to 28 percent from 24 percent year over year, according to Synergy. Networking rival Cisco's U.S. share, in comparison, dropped to 49 percent, down from 53 percent the year before. The research group said Juniper's U.S. market share had not reached that height in more than four years.

Jonathan Davidson, executive vice president and general manager of Juniper Development and Innovation, wrote in a blog post Tuesday that the acquisition will accelerate the delivery of open and automated packet optical transport solutions that integrate with its NorthStar SDN Controller and include network management features that enable end-to-end provisioning of new services.

"The combination of BTI Systems' accomplished team, innovative and open solutions with Juniper's longstanding switching and IP routing expertise positions the company well to take advantage of the fast growing DCI and Metro markets," Davidson wrote.

Like other partners, Becerra said he believes the benefits of onboarding new BTI software sales experts to Juniper will trickle down to the channel.

"It does bring in these teams that know how to sell software and hopefully transfer that knowledge to Juniper's team on how to sell software and how to get their channel partners to sell software, because a lot of us are heavy on the software side too," said Becerra.

The deal is expected to close during the second quarter of 2016.