A few months ago, Juniper Networks was in Wall Streets dog house. The technology was getting stale, sales forecasts were tepid, and the company was under investigation for alleged stock options violations.

But things appear to be picking up for CEO Scott Kriens and his company. In the past month, Juniper released several new products for routing, branch offices, MPLS, and metro-Ethernet. Whats more, the company is extending its core business while using acquisitions (i.e. NetScreen and Perebit) in security and wide area networking optimization to sell more to enterprise-sized customers. Wall Street seems pleased. With revenue up 5 percent in the third quarter, the stock price is back on an upward trajectory.

You can view this as Act 1 of Junipers renaissance. There is a tremendous amount of innovation going on at Juniper. While Cisco Systems focuses on new logos and the consumer market, Juniper is working on several packet-switching technologies that may yet shake up the relatively staid networking industry.

Aside from internal progress, expect something big on the mergers and acquisitions front. Old rumors about Juniper buying either Enterasys (somewhat likely) and Extreme (unlikely) still abound. There is also a new interesting financial buzz in the Valley. Juniper is rumored to be buying Brocade, the storage networking equivalent of the old woman who swallowed a fly (ie. Brocade bought competitor McDATA which bought competitor CNT, whichbought competitor Inrange...).

That one is highly doubtful. Juniper has shown a historical aversion to diversifying from routing to switching, so its unlikely that the company has the stomach to digest layers of storage networking technologies. A more intriguing piece of scuttlebutt has Juniper buying the ProCurve business from Hewlett-Packard so that HP can cozy up to Cisco. This one may have had some roots of truth but its difficult to believe that HP will do much until all the unfortunate scandal is behind it.

All told, Juniper has regained its stride. Just in time, too, as enterprise customers are keen to have an alternative choice to Cisco. With nearly a billion dollars in cash and lots of reasonably priced deals out there, look for Juniper to shake things up before the ball drops in Time Square to ring in 2007.