Analyst Says Camiant Turned Down Juniper & Starent

Policy server specialist Camiant Inc. appears to be quite comfy with the idea of continuing on as a standalone, private company after reportedly turning down offers from two potential suitors: Juniper Networks Inc. (NYSE: JNPR) and Starent Networks Corp. (Nasdaq: STAR).

Juniper and Starent, apparently keen to expand into policy management for cable and 3G and 4G wireless networks, have both bid to buy Camiant; however, the "Camiant board of directors has turned down both offers," says Avian Securities LLC senior research analyst Catharine Trebnick.

Trebnick says Camiant wasn't pursuing a buyout. She didn't know what the financial terms of the offers were, but she believes Juniper and Starent were looking to expand their own product policy management portfolios and add Camiant's industry-leading customer traction in this technical category.

Camiant, a Marlborough, Mass.-based company founded in 2003, cut its teeth on cable, developing a policy server that fits inside PacketCable Multimedia, a CableLabs -specified architecture that injects quality of service (QoS) into IP-based video, Internet, and voice services. It's also thrown its hat into the bandwidth management ring with its "Fair Use" extension. (See Camiant Intros 'Fair Use' Bandwidth System, Camiant Plugs Policy Server Power , and Camiant Commissions New Bandwidth Cop.)

Trebnick says Camiant has more than 25 commercial deployments and over 100 systems shipped, with Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , Cablevision Systems Corp. (NYSE: CVC), and Vidéotron Telecom Ltd. among the MSOs in its cable stable. It's also making progress on the wireless side with partners such as Sprint Corp. (NYSE: S) and Vodafone Group plc (NYSE: VOD), and aims to get a lift from 4G deployments via support for technologies like Long Term Evolution (LTE). (See Camiant Sprinkles In LTE and Camiant Hypes Footprint.)

Trebnick thinks Juniper could firm up its wireless product positioning if it was still able to woo Camiant. She estimates that Juniper has over 70 percent of its revenues derived from the service provider segment. "We don't believe the company has the luxury to miscalculate its marketing requirements for an $8.6B LTE market opportunity," Trebnick notes, adding that she's maintaining her "Neutral" rating on Juniper until it "articulates a clear wireless strategy."

But Camiant's brass is apparently happy with how things are going with its existing customer base and the wireless growth prospects ahead of it.

"I think Camiant thinks they'll be the Acme Packet Inc. (Nasdaq: APKT) of the policy management space," Trebnick says. "They've been able to evangelize early on that they're really needed in the network."

And that's translated into a leading position in the policy server market, according to her estimates. Cisco Systems Inc. (Nasdaq: CSCO) got into the policy server game in 2006 when it inked an original equipment manufacturing (OEM) deal with Tazz Networks Inc. (Tazz was down to a skeleton staff by the fall of 2007.) Cisco has since integrated Camiant with the deep packet inspection (DPI) technology it obtained via P-Cube Inc., Trebnick says. Sandvine Inc. , meanwhile, remains in the competitive mix thanks to its purchase of CableMatrix Technologies, another policy server maker, in 2007. (See Cisco Tangos With Tazz, Cisco Eyes Service Control with P-Cube Purchase, Tazz Shrinks, Shifts Strategy .)

Both Camiant and Juniper declined to comment on the latest round of speculation. Starent didn't want to comment last month when rumors swirled that Camiant could factor into the company's M&A ambitions. (See Is Starent Ready for M&A Action?)

Still, if Camiant does end up taking an offer, it won't be the first time some of its management team has cashed in. Camiant founder and CTO Susie Kim Riley helped cable modem termination system (CMTS) startup Broadband Access Systems (BAS), which was sold to ADC (Nasdaq: ADCT) in 2000 in a deal valued at $2.25 billion. BigBand Networks Inc. (Nasdaq: BBND) bought those assets in 2004, but recently opted to "retire" its core CMTS products. (See BigBand Terminates CMTS.)

— Jeff Baumgartner, Site Editor, Cable Digital News

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