Optical/IP Networks

Juniper Struggles Continue Past Q3

Juniper Networks Inc. (NYSE: JNPR)'s fourth quarter will miss analysts' expectations, as the company says there's no indication of customers perking up their buying.

Juniper is expecting revenues of $1.1 billion to $1.13 billion for its fourth quarter, less than analysts' expectations of $1.15 billion as tallied by Thomson.

The company expects fourth-quarter earnings per share of $0.19 to $0.22, compared with the analysts' forecast of $0.24 a share.

Before that pronouncement, Juniper shares were trading down $0.08 (0.4 percent) at $17.49.

Juniper had a couple other bits of news to share.

The executive vice president running Juniper's switch and router business is moving to a new role. Stefan Dyckerhoff wants to become a venture capitalist, so he's no longer going to run Juniper's Platform Systems Division. He'll maintain ties to Juniper as a consultant to CEO Kevin Johnson starting in January; his replacement, Rami Rahim, will head the platform division starting Nov. 1.

Dyckerhoff was on Tuesday's earnings call to explain his job change, but it's not clear whether he's joining a VC firm or doing venture work as part of his staff consultant role at Juniper.

For its third quarter, Juniper reported revenues of $1.12 billion and net income of $16.8 million, compared with year-ago revenues of $1.11 billion and net income of $83.7 million.

Finally, Johnson went out of his way to address software-defined networking (SDN) for a minute. A "productized" implementation of OpenFlow 1.3 will appear next year on Juniper's MX and EX routers and on QFabric, he said.

Why this matters
The economy continues to be tough for equipment vendors, at least from Juniper's point of view. The company bragged about third-quarter revenues having grown compared with the previous quarter and the year-ago quarter, but customers' spending remains tepid -- not necessarily a good sign for the rest of the sector.

As for Dyckerhoff's job change, it marks the latest in a string of executive changes and departures. Last week, CRN reported that Mark Bauhaus and John Morris, the executive vice presidents of operations and strategic alliances, respectively, are both leaving.

They follow two of Juniper's longest tenured executives, RK Anand and Kireeti Kompella.

Johnson's SDN comments were meant to ease concerns about how SDN will affect Juniper's business. That he felt compelled to make those comments, though, seems to indicate that he's getting a lot of questions about SDN. Whether it's the future of the industry or not, SDN has an tight octopus grip on people's brains. (Insert colorful illustration here.)

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— Craig Matsumoto, Managing Editor, Light Reading

manass732 12/5/2012 | 5:18:42 PM
re: Juniper Struggles Continue Past Q3

It was a very funny how Kevin talked about their plans to support SDN. Most customers do not seem to care about Openflow as much as they seem to care about SDN. Basically, how are networking vendors going to make their life simpler from manageability and customizability point of view. Openflow does not help with either of that, its the SDN architecture that helps with all of that. 

To top it all - is Juniper's strategy to be controlled by a brain of some of other "controller" vendor. They must have their current brain also being controlled by some 3rd party controller that is leading them down this flow/path ;)

For crying out loud, even a loser company like HP has announced its own controller. 


torivar 12/5/2012 | 5:18:41 PM
re: Juniper Struggles Continue Past Q3

Juniper somewhat opened up their own hardware years ago for folks to take advantage of through APIs and partner programs.&nbsp; No one really took them up on it though except for Google and even they didn't really do much with it.&nbsp;&nbsp; I think Juniper has been ahead of the game with regards to the opening up of the forwarding plane with alternative control planes.&nbsp;

Juniper is smart to wait until standards emerge for the more elaborate control functions and if things like overlay networking are built into that.&nbsp;&nbsp; SDN is still at its infancy, why spend all the resources to build something right now, it doesn't really make much sense.&nbsp;

Pete Baldwin 12/5/2012 | 5:18:41 PM
re: Juniper Struggles Continue Past Q3

You're right that most customers don't have many OpenFlow plans. I think they're all asking about it, but that's about it.

The real pressure on Kevin Johnson would probably be coming from investors. Customers are curious about what SDN will eventually mean, but my perception is that investors are feverish about it.

Regarding the controller: A lot of people think there'll be a mix of controllers; you'll buy them separately from the switches/routers the way that you (used to) buy servers separately from them.

Juniper is a believer in open-source controllers.&nbsp; They'd come from a variety of sources, and it wouldn't surprise me if they have one of their own in the works. I've got some notes on this that I'll have to elaborate on soon.

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