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Juniper Networks, which has lowered its revenue projections for the current quarter, is targeting the data center interconnect market as a source for long-term revenue growth.
Along with data center interconnect (DCI) technology, Juniper plans to also build a product for the metro Ethernet market to generate "new growth" opportunities, CEO Rami Rahim told financial analysts after releasing fourth-quarter earnings this week.
"Traffic growth in the networks that form this market [DCI and metro] is forcing our customers to consider new architectural approaches," Rahim said, according to a transcript published on the financial site Seeking Alpha.
Rahim's comments came after the company lowered its revenue forecast for the first quarter to an 11% drop year over year. Juniper had predicted a decline of 7% to 10%. The updated forecast, which fell below analysts' projections, drove shares of the company down almost 13%.
Juniper executives claimed no particular product line or geographical region contributed to the revised forecast. Instead, Rahim blamed "volatility" in global markets that made customer spending "lumpy."
Juniper believes its acquisition of BTI Systems, a maker of optical networking hardware and software, will help the company grab a share of the projected growth in metro Ethernet networks and DCI technology. Combining BTI products with Juniper's data center switching and IP routing platforms would "provide our customers with open software-driven solutions that are automated, highly programmable, cost-efficient and offer tremendous service agility," Rahim said.
Metro Ethernet refers to the use of carriers' metropolitan area networks to connect the local area networks of businesses to a wide area network or the Internet. DCI is a technology often used to connect enterprise data centers to cloud service providers. The technology also has a service orchestration piece that manages the interconnection. The global revenue from DCI equipment is expected to grow from $2.5 billion in 2014 to $4.2 billion by 2019, according to Ovum Research, based in London.
In December, Juniper introduced line card modules to boost the overall performance of its MX Series 3D Universal Edge routing hardware, which Rahim called the "sweet spot product" for metro networks. The cards, which are scheduled to ship this year, can up throughput to as much as 1.6 Tb per second.
Juniper rivals in the optical networking market include Cisco and Alcatel-Lucent.
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