Juniper Discounts Ethernet
That would make sense, considering Juniper is still approaching the enterprise from an outsider's stance relative to Cisco Systems Inc. (Nasdaq: CSCO). The company seems to be gaining ground in Layer 3 switching, but "we're seeing more discounts than we'd like as Juniper looks to seed the market," RBC Capital Markets analyst Mark Sue writes in a note published this morning.
Coincidentally, Brocade Communications Systems Inc. (Nasdaq: BRCD), is "price-stimulating" its Ethernet products as it tries to regain business, Sue writes. Brocade is revamping its whole sales approach, having hit a bumpy road after the Foundry Networks acquisition. (See Brocade's Second Shot.)
So, maybe it's a good time to be an enterprise shopping for an Ethernet vendor. As for the effects on earnings, Sue expects Juniper's operating margins to dip but only temporarily (the discounts won't last forever), and Brocade's new Ethernet plan isn't expected to be visible in earnings results for another quarter or so.
— Craig Matsumoto, West Coast Editor, Light Reading