News Stay informed about the latest enterprise technology news and product updates.

Juniper rise could be good news for enterprise tech buyers

Juniper Networks is selling to more enterprises, a trend that could heat up the competition for the wallets of tech buyers.

Enterprises may soon find fiercer competition between major networking vendors.

Juniper Networks Inc. is showing signs of a comeback after struggling with management turmoil and declining revenues. If the trend continues, tech buyers could benefit from the competitive pressure the company will place on rivals Cisco Systems Inc., Arista Networks Inc. and Alcatel-Lucent SA.

Juniper last week surprised Wall Street with better than expected second quarter revenue and profits. Projections for the second half of the year were also higher than analysts' estimates.

A deeper dive into the numbers shows that Juniper is slowly diversifying its customer base. Telecommunication carriers, particularly in the U.S., remain its strongest market segment. However, the company is selling more to the enterprise, cable operators and cloud service providers.

"In my view, the customer-diversification strategy will continue in future quarters," said Brad Casemore, analyst for Framingham, Mass.-based IDC. "We will see Juniper sell more SDN [software-defined networking] offerings to cloud service providers and Web 2.0 companies, as well as to enterprises."

Juniper diversifying

If Casemore is right, Juniper's profits will be tied less to the fortunes of carriers. For tech buyers, a more diversified Juniper means another vendor to compete for their business.

Juniper reported that enterprise sales increased 4% from a year ago and 10% from the first quarter. Service provider revenue, which includes carriers, was up 1% year-over-year and 16% from the prior quarter. While carrier sales were down, "cloud and cable providers increased year-over-year and sequentially," the company said.

"We saw good momentum in the data center with broad-based strength in the enterprise, as well as growth for cloud providers and carriers," Rami Rahim, CEO at Juniper Networks, told analysts. (A full transcript of the conference call is available on the site Seeking Alpha.)

Juniper's current product line of switches and routers, including the MX, PTX and QFX lines, are expected to drive sales the rest of the year. Next year, the company believes its new products announced in March will power growth.

Those products include a line of spine switches, called the QFX10000, and higher-performing PTX routers and SRX firewalls. "It will take some time for those new products to affect their revenue as customers evaluate [them]," said Dan Conde, analyst at The Enterprise Strategy Group, based in Milford, Mass.

Also in the pipeline is a NorthStar wide area network (WAN) controller that is in beta trials, Rahim said. In addition, Contrail, a software overlay for data center network virtualization, has moved into production deployments.

"Our goal for Contrail is simple, to make it the best networking stack for OpenStack," said Rahim. OpenStack is an emerging open source platform for building cloud services in the data center.

Juniper still faces hurdles

Juniper's success going forward is not guaranteed. While positioned for growth, the company's latest results show it still has a lot of work to do.

On a year-to-year basis, revenue in the second quarter declined 1% to $1.22 billion. Revenue from routers and switches was down 2% and 5%, respectively. Rivals Cisco, Arista and Alcatel have reported year-to-year growth in competing products.

Juniper's improvement is most evident in quarter-to-quarter comparisons. Router sales were up 19% from the first quarter and switch sales rose 14%.

Enterprises should watch Juniper to see if it can sustain growth over the next 18 months. If so, tech buyers will have one more company to consider in searching for the best deal.

Next Steps

Replacing routers with smart switches

Advanced routers and switches get smart

Configuration options for secure Cisco routers and switches

The biggest challenges in configuring Cisco routers and switches

Dig Deeper on Data Center Network Infrastructure

PRO+

Content

Find more PRO+ content and other member only offers, here.

Join the conversation

5 comments

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

Would you have Juniper Networks on your shortlist of networking vendors?
Cancel
Absolutely !! They may not have a great marketing team but their products are definitely rugged !!
Cancel
What is their advantage over Cisco or Arista?

Cancel
No. On the enterprise firewall level they have two lines that don't come together at the management level. If your an all one flavor shop its fine, but if migrating its trouble you don't need.
Cancel
Hi Steve. What do you mean by not coming together at the management level?
Cancel

-ADS BY GOOGLE

SearchSDN

SearchEnterpriseWAN

SearchUnifiedCommunications

SearchMobileComputing

SearchDataCenter

SearchITChannel

Close