TJ Grewal, vice president of corporate development at Brocade, explained at The Deal's Silicon Valley Summit that the first rule of competing against Cisco is: "Don't play their game."

This means that competitors shouldn't try to pay the same valuations that the communications equipment giant has been willing to pay in the past. Grewal noted that in negotiations with targets, the target will often point to a valuation paid by Cisco for one of the target's competitor. Grewal said his response is: "There's only one buyer in the market that pays that."

Spencer Greene, vice president of corporate development at Juniper Networks, said that the company has never competed directly with Cisco for a target. "That doesn't mean that people don't say they do. Everyone we've dealt with says they have an offer in hand from Cisco." Greene warned the audience: "If any of you are thinking of playing that card, you better be ready to back it up."

Instead of competing on price, Brocade and Juniper both try to get on the cutting edge of acquisitions and enter an area before Cisco gets there. Greene pointed to Juniper's acquisition of Peribit as an example last year of a deal in the emerging WAN optimization segment that set off a wave of consolidation driven by Juniper's competitors.

TJ Grewal at The Deal's Silicon Valley Summit

Spencer Greene at The Deal's Silicon Valley Summit

Tags: svsummit06, svsummit, m&a, brocade, juniper+networks,vc, venture+capital