Setting sights on Cisco

Juniper is not afraid of baiting rival Cisco. CEO Scott Kriens is confident his firm can continue its success in the sector — and take market share from the networking giant in the process

  • E-Mail
By  Stuart Wilson Published  December 18, 2005

|~|Scottt2body.jpg|~|Juniper is expanding into emerging markets outside of the Americas and has invested in the UAE and Saudi Arabia.|~|Scott Kriens probably doesn’t get too upset when people refer to Juniper as the ‘Cisco killer’. Before becoming CEO at the networking firm, he was the co-founder of Stratacom, which specialised in wide area network (WAN) switching products, before that company was bought by Cisco for around US$4.5billion in 1996. Since then, whatever his motivation, Kriens has helped Juniper build up an envious position in the networking industry, steadily increasing its market share at the expense of its larger rival. As well as poking fun at Cisco in its print advertising, earlier this year Juniper hired Michael Lynn, the security expert that aired details of a vulnerability in Cisco routers at a security conference in the US. Lynn quit his job as a security consultant to give the talk, which resulted in considerable bad press for Cisco, as it was seen as attempting to suppress Lynn’s speech. While Juniper built up its success in the router market, it has since branched out to other areas, such as security and application performance. IT Weekly asks Kriens what ‘s next for the networking all-star. How easy has it been for Juniper to extend beyond the service provider and carrier market and into the enterprise space and even the midmarket? The requirements for performance and reliability are identical. There are definitely some differences in partnerships and the go-to-market architecture from a support, distribution and representation standpoint, but in terms of the technology that we offer and the importance of the attributes that it has, we have found it to be almost identical. That has paid off in terms of having a lot of leverages in the go-to-market because there has been a lot of acceptance of exactly the same points. Enterprise customers are saying that their network is just as important to them as a service provider’s or a carrier’s is and therefore they need our help. How successful has Juniper been to date, in terms of cracking the enterprise market, and how much further have you got to go? Well, we feel like we have been very successful so far, and we see a lot of opportunity in front of us. The company is set to conduct about US$2 billion of business this year and about a third of that will be in the enterprise market. So it is a US$600million to US$700million business today. With regards to the security products in particular, year-on-year those products have grown at a rate of 37%, while the basket of competitors in the same market place have grown at a rate of about 15%, and the strongest of those competitors has grown at a rate of between 20% and 25%. We’ve grown at 37% — both in comparison with others, and against our own targets. We have been very pleased with the success that we have seen so far. How important are emerging markets in terms of driving revenue growth for Juniper? What are you seeing in ter-ms of the split by geography? Outside of the Americas, the market for Juniper products contributes a little more than half of the business. So between 50% and 55% of the business for Juniper comes from outside the Americas. Some of the emerging markets, like Eastern Europe and the Middle East, offer strong opportunities for us. We have invested quite substantially in Saudi Arabia and the UAE, and we have offices in Russia where we also see great opportunities. In Asia — and certainly in India where we have been for some time — but also in other countries like Vietnam, we continue to see opportunities. How do you see the percentage split changing? Does the competitive vendor landsc- ape change region by region? You know, I don’t know if I expect a lot of change in terms of the percentage contribution. I think it will depend a little bit on how network usage evolves within the countries. There is certainly a lot of opportunity for growth in percentage terms that is larger in these newer markets because they are themselves not as large. But there is also — while it will be at a slower percentage basis — a lot of opportunity within the Americas and so I think we’ll probably see a balance in the next few years in terms of contribution from inside and outside the Americas. In terms of competitors, we will see a similar situation to today. We are seeing fewer and fewer competitors able to credibly compete and grow their business. The market is consolidating in this way. It is certainly prioritising the suppliers who can bring them more comprehensive solutions. Juniper is playing its part in the consolidation process with the acquisition of companies, such as Peribit, Redline and Funk? Can you explain the thinking behind Juniper’s acquisition strategy? I will make a comment on what we are trying to do within the network and how all these acquisitions fit in to this. There are three layers to our strategy. The first is to build the infrastructure, the second is to secure that infrastructure, and now the third is to improve the performance of applications across that infrastructure. The Peribit and Redline acquisitions and recent ones, like Acorn, are all built around improving the performance of applications over secure infrastructure. And then most recently with Funk Software it was about enabling users to access the network with full protection. This is really to address the situation where a user is unknowingly carrying viruses on a laptop that they have taken home or gone on to a hotspot in a coffee shop, hotel or airport. Funk Software is a leading supplier for providing software with open standards capability that makes sure those devices are clean when they get on the network — so it is an extension of security capabilities and a further commitment to open standards, which is really what drives our strategy. It is not just enough to have the solutions we are talking about; they have to be open and available to all equipment and all suppliers to participate in. That’s probably one of the strongest distinctions in the approach that we are taking.||**|||~|Scott1body.jpg|~|Kriens is quick to emphasise that Juniper’s growth has been organic and not just as a result of acquisitions.|~|Are the enterprise customers, carriers and service pro-viders now starting to understand the importance of open standards as opposed to using proprietary standards-based suppliers? We definitely see that. We see our customers both in the enterprise and service provider market saying, “We need commitments from companies like yours to drive open standards to prominence because we want the choice of whom we do business with.” The problem with the alternative approach is that the choice is in the hands of the vendor, and this is very much a visceral issue for our customers. They believe, as do we, that since they are the ones spending the money and making the decisions, they should be the ones making the choices too. Juniper is integrating multiple acquisitions and experiencing rapid organic growth. How easy is it to maintain business agility against this backdrop? Sometimes it is a bit like the duck on the pond — the feet are moving faster below the surface but we do not see it as the duck glides gracefully along. We have grown the business by more than 50%, we are now doing business in 75 countries and we are expanding in multiple markets across the service provider and enterprise markets. We are growing the skill sets within the organisation to be able to do that effectively at the same time. The way to do that — the way we have approached it and what we believe — is to maintain the priority on satisfying the customer and meeting the requirements that they have. Sometimes that will cause us to scramble within the company — or below the surface — but we do it with a clear understanding of what our priorities are. I have always found that that is the best way to get through any kind of challenge: with an unambiguous clarity of purpose. As long as our users are happy then the rest of the problems we have are unimportant. Can the Juniper duck swim even faster? Well, there’s certainly a lot of opportunity in this market and yet we can only capture that opportunity as fast as we can maintain our priority of making sure that the customers are satisfied and that we have done the kinds of things that we need to do. Time will tell as to how fast this thing will go and how many simultaneous priorities we can juggle, but what we will always do is make sure we gauge those questions and answers by whether or not we believe we can meet the commitments we have made to customers and we will never go any faster than that. Where do you see the next opportunities from a technology standpoint? One of the most interesting opportunities we have seen recently is with voice over internet protocol (VoIP). Our partnership with Avaya has been very helpful in this area and it is already something that the customers perceive with interest. We are spending time and energy together. So certainly the VoIP space; but we see that as something we can move into as a partner —hence the relationship with Avaya. So that’s one. And then there is this whole world of application performance where some of our acquisitions and subsequent investm- ents have been made. It is a driver because, even with a secure infrastructure, it is only valuable to the extent that our customers can put their applications across it and notice an im- provement to their businesses. And that benefit is measured by the improvement in those applications. Those are the two areas. We are addressing VoIP through partnership and application performance through our own efforts. You mentioned partnerships there. Some networking vendors still claim to offer a one-stop-shop or an end-to-end solution. Talk me through the importance of vendor alliances and solution ecosystems. It is another example of the importance of open systems because, when someone says end to end, that’s a codeword for proprietary. For example, in the VoIP space we also partner with Siemens, NEC and Ericsson. All of those companies have expertise, a customer base, support, service and integration capabilities for providing VoIP solutions to customers and we provide the intelligent infrastructure. The customer has a choice in this model of making their decision around VoIP consistent with their requirements and then making the decision around the infrastructure — knowing that the companies they are doing business with are committed to giving them that choice by being interoperable and working together. The feedback we have got from customers has been very supportive of open standards and the non-proprietary approach. Is the vendor landscape healthy in the networking arena at the moment? New companies now seem to be swallowed up by bigger players much earlier in their lifecycle. I think there are too many vendors out there today for what the customers need. In the future we will see fewer of them. And there is a particularly difficult place to be as a vendor — between US$20million at the low end and less than US$1 billion revenues at the high end. That range is almost no-man’s-land because you are not sizeable enough at that stage to be able to claim comprehensive coverage or warrant a great deal of attention from customers. What we find — and one of the reasons we have had the recent activity in terms of partnering or making acquisitions — is that there is an understanding of that and the customers have been driving not only us, but also the smaller companies, to say we need you guys to find a way to work together. They are telling the vendors that they are not interested in scattering the business all over the place. If you can work together, then there are opportunities. Is that why so many acquisitions are happening and new companies with new technologies get picked up so early? And what does this mean in terms of Juniper’s own internal research and development (R&D) efforts? Well, Juniper will spend about US$350million this year on our own R&D and by the way, as a sort of a data point on that, the growth that we have made in the last year has been almost entirely organic. The acquisitions we have made have contributed a very modest amount — about 3% to 5% at most. The growth we have achieved has come as a result of the organic investments we have made, and that will always be the case at Juniper. We have made acquisitions if we see the opportunity but Juniper will always be driven by organic development and the intellectual property that exists within the company. The R&D investment is really within the three areas of infrastructure, security and application performance layered one on top of the other and then the integration of those three. When we improve the performance of an application we do that in concert with the security and infrastructure so that we end up being able to assure the user that they will have a safe network experience and the performance and the expectations they have when they click will be met by the entire infrastructure. It is not only the performance of the application but also the security and reliability underneath it — all of those attributes. Threading all that together is really where a lot of our R&D goes. What is your view of the CEO’s overriding role and how easy do you find it to delegate within Juniper? One is leadership across the company and, ultimately, it is my responsibility for synchronising the market and the customers with Juniper’s abilities. CEOs in any company are forced to make a lot of choices and tradeoffs that are difficult. If the tradeoffs were easy or the choice was simple it would be made elsewhere, and so by the time it comes to me it is already a difficult decision. My job is to make that decision based on the understanding of the market and the company and then provide the leadership to the company through the team of executives that helps us to make that decision’s success self-fulfilling. Most of the decisions that are made have the ability to be successful based on execution. One of the things Juniper has been committed to since the first day has been on execution — not only making the decision but also making the decision right. You rely on your team for that execution. How easy is it to recruit and maintain the best talent in the networking industry to ensure that execution is a success? It is difficult in this marketplace. In many cases we are at the cutting edge — building capabilities and developing technologies and solving problems which, in some cases, have few precedents. It is very important to find people excited by that challenge and people who, although they may not have seen those problems before, get excited about the opportunity. It is sometimes a little bit easier at Juniper than it might be elsewhere because we have a great deal to offer. There is stability in the company and potential exists personally, professionally and financially in Juniper. So I suspect it might be a bit easier than in some cases. But it is still very important and often difficult to find the right people and make sure that those people fit the business. What are your three key objectives for Juniper to achieve in calendar 2006? Open standards across the market is certainly one. Improving the users’ experience with the network would be another and extending the brand and reputation of the company as a leader in the marketplace. At least in terms of facing the market those are the three, but there are also some things that we want to drive inside the company. Inside the company it is operational excellence and leadership development and it is perpetually recruiting the premium talent in the marketplace. ||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code