Nokia denied a CNBC report that the company was preparing to make an offer to acquire Juniper Networks for $16 billion. 

Nokia noted that it doesn’t typically comment on market rumors, but said it was compelled to do so amid the report of M&A chatter, which caused shares of Nokia and Juniper to rise in after-hours trading. Nokia issued this statement:

“Nokia is not currently in talks with, nor is it preparing an offer for, Juniper Networks related to an acquisition of that company."

CNBC had reported that Nokia, which acquired Alcatel-Lucent in 2015 for $16.6 billion, would be looking to shore up in areas such as security and routing through an acquisition of Juniper, and would be paying a hefty premium for the company. Juniper’s market cap sits at about $11.1 billion.

Nokia recently scaled back its VR camera and software business, but likewise expanded into the cable access network sector following the acquisition of Gainspeed.  

RELATED: Nokia Touts Versatility With Virtualized Distributed Platform for Cable Operators

Juniper Networks said Liberty Global will use its vMX platform to support a network functions virtualization (NFV) effort at the cable operator, which serves about 20 million customers across Europe, Latin America and the Caribbean and manages more than 10 million WiFi access points.

Juniper said the deployment marks a NFV-based approach, as Liberty Global will use the vendor’s vMX, billed as a software-based, virtualized MX Series  Universal Edge Router that runs on off-the-shelf x86-based servers, across its footprint. 

Using the vMX as a “virtual route reflector” will help the operator scale its control plane by spinning up new ones on an on-demand basis, they said.

"Virtualization solutions streamline our infrastructure, our operations environment and our global business outcomes,” Andy Grotzke, VP of core network strategy and engineering at Liberty Global, said in a statement. “While our first NFV deployment is for virtual route reflection, we are also evaluating the vMX to rapidly add network capacity and new customers. The ability to leverage a broad set of virtual routing capabilities is very important to Liberty Global as it will enable agile service innovation and increased operational efficiency."

Liberty Global is an existing Juniper customer that uses gear such as its MX Series 3D Universal Edge Routers and PTX Series Packet Transport Routers.

As the information-driven and connected world has evolved, and the cloud has proliferated, customer expectations have become more demanding and immediate. The movement of commerce and customer support into the digital realm has also put pressure on the industry as a whole, changing the way business gets done.

Service Providers (SPs) have found themselves at a crossroads. Many are turning to Software Defined Networking (SDN) and Network Functions Virtualization (NFV) to fundamentally transform the economics of their business.

As these transformations take place, there are three things SPs need to know about the changing market and what they can do to adapt.

(1) Agility Is Key

Over-the-top (OTT) providers and other more nimble SPs are leading the way in this new era of immediacy with cloud and virtualization technologies that give them more agility and a better way to address the market’s demands for instant fulfillment. These providers are striving to, first, rapidly roll out new and customized services almost instantaneously to address anticipated — or in some cases, unanticipated — customer needs. When done in an environment where they can leverage automation, this can be accomplished in such a way to keep a tight lid on operational costs. Finally, leveraging an open environment with strong partners is critical to ensuring the flexibility to manage their risks and options in this multi-year evolution.

These technologies are very “forgiving.” Since the service investment is more closely aligned with the expected revenue, if a new service doesn’t take off, providers can “fail fast,” rapidly scaling down and redeploying assets without missing a beat. But if the new service is a success, they can “scale fast” to quickly capture maximum value.

As a result, “value” migrates to rapid service innovation with plain old network connectivity increasingly becoming a commodity. Providers who follow this new approach will meet the needs of their existing customers quickly and efficiently, reduce operational costs and reduce the financial and operational risk on their organization.

The simple truth is that SPs need to adopt this new mindset, and for many, the right technology partner will power their ability to do so.

(2) The Automation Imperative

While quickly harnessing the capabilities mentioned above to capitalize on innovative ideas is the future, successfully implementing them is another story. SPs are burdened by costly planning and development cycles that don’t match the pace of today’s escalating requirements. Most service and network infrastructures are designed and deployed in a rigid, manual, step-change fashion that can take from 12 to 18 months to roll out, require large upfront investments and are difficult to modify midcourse or after completion.

It’s no surprise, then, that service providers take a risk-averse approach to service development — these large investments of time and money aren’t recoverable if the market changes or demand does not materialize.

But market demands, combined with this approach, have created an innovation gap between customer expectations and what network providers can realistically deliver. Many application vendors have eagerly filled this void, ironically by using existing SP networks for connectivity to deploy their services.

There are a few systemic reasons behind this innovation gap, including legacy environments based on complex manual workflows, which limit speed and increase cost; and the use of a fixed physical infrastructure that requires stringent testing and time-consuming modifications. Finally, SPs have limited network intelligence and visibility, precluding them from fully leveraging the information running through their networks.

More nimble SPs are automating and virtualizing their environments not just to reduce operational expenses but to rapidly iterate and test new services; then, depending on the success of the service, these providers decide whether to scale or “fast-fail.” The contrast is striking.

While network providers — constrained by a lack of experience with new technologies, as well as an operational structure and culture that evolved for a different marketplace—take months or years to identify a new service and source the technology to address it, companies that grew up on the web embrace DevOps environments, resulting in more agile service creation.

Again, partnering with a technology provider who already possesses these capabilities can jumpstart or augment an SP initiative.

(3) Future Proof With a Physical-Virtual Infrastructure

For SPs that remain mired in the old approach, the gap will only widen; they will be further marginalized and, as pricing pressures intensify, their already dwindling profits will continue to erode. At the same time, they must continue to invest in connectivity to deliver existing services or risk getting blamed for poor customer experience. It is truly a quandary.

Network providers need to take a different approach. The current network investment cycle is slow, with investments made in advance of demand; the new network model, on the other hand, is responsive to demand and keeps its options open. In order to advance with agility in today’s market, network providers need to adopt a carrier-grade, open network platform — one that accelerates delivery cycles and reduces operational and upfront expenses while minimizing risk.

This evolution requires software-driven workflow automation that strengthens and streamlines service delivery. Workflow and systems automation not only reduces operational expenses, it allows customized services to iterate quickly — moving from concept to testing in a matter of days rather than months, and with a smaller cost footprint designed to match expected revenue.

Such an approach requires a mix of physical and virtual infrastructure that optimizes investments while dynamically changing the network to meet service needs. Virtualization enables variable cost business models, which means lower up-front costs and lower risk. While dedicated boxes can deliver better price-performance and higher potential margins, they also come at a premium; the higher fixed-cost model means higher risk — especially when demand is uncertain and customer needs are dynamic. Smart providers follow a simple rule of thumb: virtual for flexibility and options; physical for efficient scalability.

The bottom line is that today’s SPs can compete and win when they pivot their businesses to quickly develop new services, implement greater efficiencies and reduce risk. Strong technology partnerships that allow SPs to take advantage of breakthroughs such as SDN and NFV to run across and build upon legacy systems are key for rapidly adapting to customers’ changing demands.

And ultimately, the answers to ongoing questions about which direction to take in a changing market will come from data. Indeed, network analytics can be used to predict where the market is going and anticipate what your customers need before they even know it themselves. This unique and direct connection to customers is a distinct competitive advantage that allows innovative SPs to eclipse what their competitors are delivering and thrive in our changing economy.

Paul Obsitnik, is vice president of service provider portfolio marketing at Juniper Networks This contributed article is based on awhite paperpublished by the company.

A far-reaching technology and business relationship forged by Ericsson and Cisco Systems will focus on next-gen networks and wired/wireless convergence and virtualization, but it also spells trouble for several of their networking rivals.

“[W]e think this news bodes negatively for competitors and partners, including Alcatel-Lucent, Nokia, Juniper and Ciena,” Raymond James analyst Simon Leopold said in a research note issued Monday in the wake of the Ericsson-Cisco agreement.

Investors seem to agree, at least with respect to Juniper, whose shares were down 7.88% in mid-day trading Monday. Feeling less of the brunt was Ciena (down 1.85%), Alcatel-Lucent (down 0.86%), and Nokia (down 1.46%). Ericsson shares were up 1.35%, and Cisco’s were down 1.09%.

Leopold said the new relationship makes business sense for Ericsson-Cisco, in some of the same ways it does for the pending merger between Alcatel-Lucent and Nokia.

“Both companies (Cisco and Ericsson) bring intellectual property and R&D to the table,” Leopold said. “ Cisco's greatest strengths lie in software, switching and routing, along with its powerful enterprise channel, and Ericsson brings strength in wireless, services, and telco network management."

While he is optimistic about the partnership, which ties together similar challenges and objectives, Leopold warned that many such arrangements have not panned out. Juniper and Ericsson have been partnered up for several years, but have “suffered after Ericsson acquired Redback,” he pointed out.

On a call Monday to discuss the deal in more detail, top execs with Cisco and Ericsson highlighted the incremental growth opportunities it presents, and focused less on how the agreement will impact existing partnerships with other vendors.

Ericsson and Cisco have been in discussions about the deal for about 13 months, with a “significant acceleration” in those talks in the last six months, Cisco CEO Chuck Robbins said, noting that Ericsson’s service reach (65,000 people in that group) complements Cisco’s much smaller 11,000.  “It’s very much about looking out ahead of what’s in the markets and dramatic transformation of networks and IT.”

“This is a big bet for both of us,” added Ericsson president and CEO Hans Vestberg.

Both Vestberg and Robbins will have management oversight of the partnership, which aims to create an additional $1 billion in incremental for each company by 2018.

Why not just merge the companies? Robbins said partnership was the best way to accelerate the goals that the companies can bring to the table with their respective products and technologies.

“We think that this brings the innovation from both sides and allows us to move now. It allows us to absolutely deliver solutions to our customer immediately”

Vestberg agreed that Ericsson had options to build, buy or partner to fulfill its longer-term missions, “and partner was the only way forward in order to make it efficient.”

“We believe this is the right move for us, right now,” Robbins added.

Vestberg said Ericsson’s existing vendor partnerships will remain intact, and views the Cisco deal as a growth opportunity that will also enable the company to broaden its portfolio.

Shares in Juniper Networks were down more than 5% in pre-market trading Friday, the morning after the company announced that it was reducing third quarter revenue guidance.

Juniper said revenues for the period are now expected to be in the range of $1.11 billion to $1.12 billion, down from previous guidance of $1.15 billion to $1.2 billion. The primary culprit: lower-than-anticipated demand from service providers, particularly in the U.S.

Juniper, citing its ongoing cost-reduction initiatives, said it also expects non-GAAP net  income per diluted share to be in the range of 34 cents to 36 cents, versus original guidance of 35 cents to 40 cents per diluted share. Juniper Networks will release third quarter results on October 23.

Juniper is looking to expand its cable presence in part by partnering with Gainspeed on a “virtual” form of a Converged Cable Access Platform. Juniper has also invested in the cable access startup.

Raymond James analyst Simon Leopold maintained his “market perform” ranking on Juniper. “We think Juniper's cost cutting and efforts to evolve to adapt to software centric networks offer encouragement, but we think it's prudent to stay on the sidelines on the stock,” Leopold wrote in a research note issued Friday.

Juniper shares were down $1.14 (5.44%) to $19.80 each in pre-market trading Friday.

Juniper Networks and Gainspeed, the startup formed by DOCSIS pioneer Shlomo Rakib, fleshed out earlier disclosed plans to develop a virtualized  form of the Converged Cable Access Platform (CCAP), a super-dense architecture that will run all services under the same roof and combine the functions of the edge QAM and the cable modem termination system.

Juniper, whose  VC arm headed up a $10 million “B” round in Gainspeed late last year, said it will integrate Gainspeed’s vCCAP technology with  its MX Series 3D Universal Edge Routers and EX Series Switches.

Those details emerge more than a month after Gainspeed identified four initial vendors that it will partner with on the development of an interoperable virtual CCAP ecosystem. In addition to Juniper, Gainspeed is also working with CommScope, Netgear and JDSU to help it create an interoperable ecosystem. CableLabs, which handles interoperability specs for the cable industry, has initiated a project that will investigate a vCCAP, with a technical report expected to come out by the second half of the year.

Gainspeed and Juniper said one aim of the architecture, which is more distributed than first wave of more centralized, monolithic CCAP-pointing products, is to help operators better automate and scale their edge/access network infrastructure while also reducing costs.

The resulting vCCAP architecture isn’t rolled out yet, but the vendors claim that their approach can reduce total cost of capacity by as much as 67% by reducing power, space and cooling constraints on existing facilities and by eliminating the “physical” CMTS.

And the approach appears to be gathering some interest among the operator community.

"We are excited to see innovation in our DOCSIS edge and pleased to see a networking partner like Juniper working with an innovative company like Gainspeed to help bring this forward,”  Sam Chernak, SVP of network architecture at Comcast, said in a statement.

"The rapid transition to IP-based video services has turned the cable industry on its head. Cost effectively delivering new IP-based services will require new and innovative approaches. We're excited to be working with Juniper Networks and Gainspeed. Their new Virtual CCAP solution promises to revolutionize the network and enable an accelerated migration to IP,” added WideOpenWest chief technology officer Cash Hagen.