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Two weeks ago, rumors hit a fever pitch that EMC (NYSE: EMC ) was looking to buy Juniper (NYSE: JNPR ) . At the time, I noted that the buyout chatter didn't add up and that Juniper investors shouldn't expect any quick cashout. I suggested that EMC was likely to continue on its path of buying up smaller players in strategic areas.
Today EMC hit the acquisition trail once again, and the target was just a wee bit smaller than Juniper. The company agreed to acquire Silver Tail, a Web security firm that will fold into its RSA Security division. No terms were disclosed on the deal, but considering Silver Tail closed a $20 million round of Series B funding in June 2011, you can expect the deal size wasn't large by EMC's standards. Investors might remember back to 2009 and 2010 when EMC pulled off a couple $2 billion-plus deals to buy Data Domain and Isilon. More recently, subsidiary VMware's (NYSE: VMW ) buyout of Nicera was a $1.26 billion deal.
Nonetheless, the deal keeps moving EMC in its long-term strategic direction. Much of the hardware in its storage systems is long-since commoditized, so EMC has continued embarking on strategies to put it on the cutting edge of software and services. In 2006 it purchased RSA for $2.3 billion to integrate more security into its offerings; small acquisitions like Silver Tail keep it on the cutting edge in the space. Silver Tail offers real-time fraud detection that's particularly attractive to the financial services space.
All this is to say that just because EMC made a minor acquisition in the security space today doesn't by itself rule out a Juniper deal. However, it does once again demonstrate the kind of smaller deals EMC is likely to make to fill in strategic holes in its storage systems and other services. Instead of looking to Juniper for EMC's next deal, a space like flash storage is much more likely.
EMC buying Juniper to go head to head with Cisco (Nasdaq: CSCO ) might spice up the networking space, but a direct collision course between the two isn't yet a foregone conclusion.
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