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Juniper's switching revenue dives in 1Q11. Bounceback expected

Juniper Networks’ EX switching business nosedived in the first quarter of 2011, so what does it mean? The people who run the numbers aren’t forecasting doom and gloom at all. However, they would like to see Juniper get more sales engineers out in the field.

Juniper’s switching revenue dropped by 23% and ports shipped dropped by 15% on a quarter-by-quarter basis from 4Q10 to 1Q11, according to networking market analysis firm dell’Oro. However, dell’Oro director Alan Weckel pointed out that sales were still up on a year over year basis (up 22% in revenue from 1Q10 and 51% in ports shipped). Also, the industry revenue as a whole sank by 12% in that same span of time.

Juniper competitors will point to the numbers and say juniper sank further to everyone else. Weckel says the numbers are not reflective of Juniper’s technology but of market timing and a challenge with sales execution.

“On the modular side they started shipping new 40-port line cars for the EX8200 in Q410,” Weckel said. “There was a lot of pent up demand for those line cards, and that bolstered the Q4 number and weakened the Q1 number.”

Weckel said Juniper’s QFabric announcement also caused a lot of uncertainty toward the end of last quarter, which affected sales a bit as customers tried to figure out how the EX line and the QFabric line would coexist.

Weckel said Juniper’s biggest challenge is growing off the current base of customers for its $100 million switching business. “To do that, you need to repeat $5 million deals on a regular basis. That’s fairly challenging,” he said.

Juniper’s biggest challenge right now is hiring enough sales engineers to keep its market momentum going, he said. “Their technology from a competitive landscape perspective is really quite good,” Weckel said. “It’s really more about execution. Their track record to get to $100 million was fairly impressive, so having a quarter breather, especially around QFabric, is not something to get too worried about. I’ll be looking closely at it to make sure it corrects in the next two quarters.”

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