Cisco goes on offensive against Juniper Networks; is HP next?

Ah, the joy of a good brawl between two heavyweights. While the latest tiff between Cisco (Nasdaq: CSCO) and Juniper Networks (NYSE: JNPR), doesn't exactly carry the panache of Ali and Frazier's "Thrilla in Manila," [or the animus of the very dysfunctional relationship Cisco has with Hewlett-Packard (NYSE: HPQ)] it nevertheless portends more toe-to-toe battles as the struggle for networking-gear dominance heats up--especially as the market for gear seems to become a little less free spending.

A touch history of the less-than-amicable relationship between the three leaders in the network gear segment:

Back in May, Hewlett-Packard very publicly got after Cisco at Interop, deriding what it saw as a lack of innovation and criticizing its network business.

Cisco, at the time, quietly absorbed the ridicule, perhaps, in part, because its stock was spiraling downward. CEO John Chambers was in the process of changing the company's focus from the inside out, shedding under-performing products and divisions, planning a major cut in the company's workforce, realigning executive responsibilities and, generally, trying to get the company refocused on its core business--which, with its stick seemingly setting new 52-week lows daily, was a more urgent task.

After a "not bad" fourth quarter earnings call, during which Chambers focused on the "next Cisco," the stock has slowly begun recouping some it its losses.

HP meanwhile, suddenly has its own problems. Videoconferencing startup Vidyo in August grabbed a couple of HP execs, and, just last week, the Wall Street Journal reported that HP's decision to dump its PC and tablet businesses had customers worried that the company was "lost right now." More importantly, the perception was costing HP some business, as customers were taking a wait-and-see attitude to predict where the company was headed.

Juniper Networks, which regularly had been mentioned as having taken market share from Cisco with products that were less expensive--although it had done so with less hype than Hewlett-Packard-had a miserable quarter, too. After releasing data, it saw its market cap tumble 20 percent, or $3.3 billion. Piper Jaffrey analyst Troy Jensen said he believed Juniper "could likely hit a several-quarter air pocket."

Today, The Wall Street Journal reports that Cisco has been stirring the pot with Juniper, making public statements about the company missing delivey deadlines on several products, and that's not the norm for Cisco, which generally has built its business quietly without a lot of drama.

But, it's funny what happens to a business when it starts to slip a bit.

Just like aging actors in Hollywood who disappear for a little plastic surgery and resurface with a new project or, better yet, a little scandal, it does wonders for their careers.

Cisco's relatively minor plastic surgery came in the form of dumping its Flip video camera business, selling off a factory in Mexico and a 10 percent cut in workforce.

Perhaps its increasingly public dust up with Juniper will serve as its scandal, it's certainly a change of form for the normally milquetoast company.

Hopefully, it will be enough to get its career, er, business back on track.--Jim