Juniper’s expansion plans

Networking vendor Juniper is making huge inroads in the region, expanding its headcount in key markets on the back of customer wins such as an enterprise deal with UAE telco Etisalat

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By  Stuart Wilson Published  July 9, 2006

|~|Schenk,-Gert-Jan-MAINbody.jpg|~|There is clear desire to have Juniper pre and post-sales support staff on the ground here, claims Gert-Jan Schenk.|~|While Juniper hasn’t always been seen as one of the top tier players in the networking market in the Middle East, that perception seems to be changing: an enterprise deal with UAE telco Etisalat to overhaul its internet protocol (IP) infrastructure with the vendor’s routing platforms is just one success story. With more than half of Juniper’s business now coming outside the Americas, and with fast-growing markets such as the Middle East and Eastern Europe being targeted by the firm, its growth prospects here in the region look sound. Overall, the Europe, Middle East and Asia (EMEA) region makes up one- third of Juniper’s total revenues. The company has recently strengthened its presence in Dubai and Saudi Arabia, and now claims to have more than 50 staff in the region. It also has offices in Egypt. Globally, Juniper is expected to spend US$350million on research and development (R&D), which is within the three areas of infrastructure, security and application performance. It is paying special attention to open standards across the market, improving the users’ experience with the network and extending the brand and reputation of the company in the marketplace. Stuart Wilson spoke to Gert-Jan Schenk, vice president of operations EMEA, on a recent visit to Dubai. Schenk is an industry veteran with more than 15 years experience, having previously worked at such firms as Redback Networks, Madge Networks and Unisphere Networks, where he was vice president, before Juniper Networks acquired the firm in 2002. At Juniper he has focused on the enterprise market and the expansion of its portfolio to include security, enterprise routing and application acceleration solutions. In an EMEA role, how much of your time is actually spent focusing on Juniper’s operation in the Middle East market? Well, for this visit I am here for four days in total. At the moment I come to the Middle East at least once every other month for a couple of days at least. In the past we tended to fly in and out on an opportunity-led basis, but now because we are growing so rapidly in the region it is much more strategic. The level of activity in the Middle East is growing and the number of people that we are hiring reflects that. It is fixed in my agenda to come here and meet customers and also meet the members of the Juniper team. The Middle East is now one of the fastest growing regions within the EMEA theatre. How quickly are you growing your headcount? The Dubai office seems a bit empty today. An empty office is always a good sign to me. It means that our people are out in the market working with customers. If you look at this region, I hired Mohamad [Abdul-Malak, regional director] in early 2004 and today we have about 25 people in the UAE, 22 in Saudi Arabia and additional staff in Egypt. It has been a huge increase in numbers and we are still hiring aggressively because there are even more new territories that are opening up. Pakistan for example represents a whole new territory for us to explore and at the same time there is significant room for us to grow in markets such as Lebanon and Egypt. The Middle East is absolutely a critical region for Juniper. Is it essential to be here on the ground? Can you not serve the region remotely? We have a lot of customers that want to see us making a real investment in the region. They always say, ‘Listen, you will get business but we expect you to invest and have dedicated people here to serve us in the region’. For the people here — especially in the large account space — there is clear desire to have Juniper pre and post-sales support staff on the ground able to help the customer very quickly if an issue arises. I think that is the way that the business is going. The more mission-critical a network is, the higher the stakes are both for the vendor and also the end-user. And it is not only about doing this with our own people, it is also about creating a network of partners across the region that are trained and certified and can assist end-users, both in the service provider and the enterprise space. What are you seeing in terms of the development of your customer base in the region at present? Service providers (SPs) — that is where Juniper is coming from. In the past, the largest account in the service provider market was Etisalat and we were supporting it remotely. It is still for us one of the bigger customers we have in EMEA. We have won quite a few other customers — there is also a referral to STC, Jordan Telecom and we have won deals with Telecom Egypt as well. It is still a strongly growing market because in this region there is still more competition coming and this is also why you see more of the SPs focusing on flexibility, cost-efficiency and service delivery. For us, that is a very big opportunity and we are investing in resources and products. However, if you look to the enterprise, that is probably where we have been growing most in the region, both in resource but also in the sheer contribution to the overall success. If you look at the sectors that we are focusing on specifically in the enterprise space, it is really the finance segment and the public sector. In these areas, security is an extremely relevant topic and we have a very strong security portfolio and this is where we have seen a lot of early success. Customers have said that it is good to have a world player — one of the biggest players in security — touching down here in the region. How much time do your sales people spend hunting for new accounts and how much time is spent ‘farming’ with existing clients? I think, because of the fact that we are still opening and widening our reach — normally it would be about 50:50. However, in this region about two-thirds of their time is spent opening doors and getting into new accounts and about a third of the time is up-selling and cross-selling to existing clients. Overall, in Europe, [with] the latest Canalys numbers for Q405 for the whole of EMEA that was the first time that Juniper was the overall leader in SP routing in EMEA. We had 40% market share and Cisco has 31%. That is a significant step-up for us. We are now the number one because of all the clients we have, including many in this region. In Europe, I don’t think there is any SP left that is not using Juniper as a first or second vendor. Every network vendor claims to be in every SP in the Middle East. Can you give some insight into how important your presence is in these accounts? I think talking about SP infrastructure on a worldwide basis there are only two players that really count. Yes, there are other vendors selling bits and bobs but there are only two vendors selling in a major way, which is Juniper and Cisco. We have won a lot of momentum and that is because many SPs want to see an alternative to their incumbent vendor. In the past Cisco had the monopoly in most of the Middle East. That is why many of the customers pushed us to make significant investment in the region and said that we would get a significant part of their business. What is driving them to look for that alternative? I think there are several areas. There are economic motives. If there is only one company offering a solution prices may not be as competitive as they should be — that is clearly where we bring a cost advantage to our customers not just through using our products but also by putting a better mechanism in place for market pricing. The other part is offering a very good alternative in technology. This is where we can help them to introduce new services faster to market and that is what it is all about today. It is not a question of are you going to offer a service but when are you going to offer it, because if you don’t do it someone else will try and do it more quickly and you will see a lot of churn in your customer base. What differences do you see between SPs in the Middle East compared to Europe? I think one; there is not so much of a legacy-installed base, which clearly gives the SPs here in the region the ability to go immediately forward to the best solution available in the market today without thinking too much about where are we today and where do we want to be. For example, next generation networks are a hot topic. At the moment a lot of the SPs in Europe run two, three, four parallel networks, which is very inefficient, very inflexible and very costly. In the Middle East it is easier for them to say are we going to invest in separate networks or one centralised one. That is why Etisalat chose Juniper years ago because at that time they had almost a blank piece of paper and said what is the best network we can build to run multiple services over one infrastructure. That is the reason why they chose Juniper. How much potential do you see for internet protocol television (IPTV) in this region at the moment? Throughout Europe, it is something that all SPs are putting at the top of their list. If you look at the content and services that they can deliver through IPTV, which is a big benefit. I think in this region the big benefit is that a lot of the SPs have the infrastructure in place and can move towards IPTV broadcasting. The Middle East could potentially be one of the markets with the highest adoption rate because there is not a lot of cable in the ground; satellite is still very costly and not always efficient, so I believe there is still a very good opportunity. But there are differences between the countries. Obviously in Dubai, in all the buildings going up around us, they have the latest infrastructure in place with cabling making it easy to roll out a triple play network including IPTV. If you go to some other countries there may not be such a good infrastructure, but the well developed markets like the UAE, Saudi, Oman; this is where you will see a lot of these investments coming in the near future. All the SPs that we are talking to are already building it or will start doing so in the next 12 months. Are these deals signed off with SPs? There are a few elements to IPTV and SPs need to sign agreements with all the media companies for the content. That is something that can take some time. There will need to be a compelling event to introduce the service. In many countries they have done this based on football: we have seen a huge boost around the World Cup. Fastweb in Italy is probably the biggest IPTV operator in Europe now. Their success was partially due to the World Cup in Germany this year. Imagine arriving in a hotel in Dubai and going to your TV and seeing a game that you had missed while on the plane or even just picking the highlights. There are many vendors jostling for position with regards to IPTV. Is the landscape clear yet and how do you see Juniper’s role? I think that it must be based on open standards and Juniper has always, and will always, be committed to open standards. I think that is the key. We are focused on an open ecosystem and we are aligning with the key players in that market. We recently announced an agreement with Microsoft focused in IPTV. We don’t try to make it based on proprietary technology and instead focus on widely spread standard. There is no desire to make it a closed standard. It is like PC operating systems; it will only work if you give your system to other vendors to build applications on. The best-of-breed or one-stop-shop solution that has rumbled on for years; has that debate moved forward at all? I think if you talk about technology, you will always see vendors trying to keep it for themselves as long as possible. But, we are now a company that had its ten-year anniversary recently, and we have always actively participated in standards bodies. We have always pushed for participation from other vendors and partners and we will always continue to do that because it is what our success is built upon — open standards, alliances and partnerships. For the customer it is an open debate because having a proprietary solution could help you for a very small window of opportunity if it is brought fast to market. But you could very soon get in a position where you are fully dependent on one supplier and can not benefit from what other vendors are adding to these solutions. You need to watch out for the end-to-end debate. For me it is quite amusing when vendors such as Cisco are using this argument, saying we do the core, security and switches. To me, switches are just like a cable — how relevant is it for an end-user to have cables from the same manufacturer? What is important is for the intelligent components in the network that provide you with the quality of the service and the security need to be in tune with one another. For everything else, buy what suits you best in terms of pricing and local supply. ||**||

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