Juniper: The Other Cola?

Juniper Networks Inc. (Nasdaq: JNPR) may now be thinking of itself as Pepsi to Cisco Systems Inc.'s (Nasdaq: CSCO) Coke, if one financial analyst is correct.

Juniper is developing a product code-named "Pepsi," which is a router designed to compete with Cisco's 2600 series of branch-office routers, says Stephen Kamman, analyst with CIBC World Markets. Juniper officials declined comment.

The product development, if true, would put Juniper even deeper into Cisco's enterprise networking terrritory and turn up the intensity in an already fierce rivalry. It also might have the unintended consequence of reinforcing Cisco's "Coca-Cola" incumbent leadership in the router market.

Few details of Pepsi are out, but Kamman says the project is interesting as a way to wield security technology Juniper is acquiring from NetScreen Technologies Inc. (Nasdaq: NSCN). "It's one of the places where you'd get synergy with the NetScreen acquisition," he says.

Juniper appears to have chosen this year for an all-out assault on Cisco's edge and enterprise networks. Its most bold move in that direction is the pending $4 billion acquisition of NetScreen. Juniper also launched the M320 to bolster its multiservice edge offerings, and some analysts think the company is eyeing further acquisitions related to enterprise routing. (See Juniper Buys NetScreen, Juniper Hatches the M320, and Would Juniper Go to Extremes?.)

Cisco's 2600 is a small box, compared with the likes of Juniper's M series. Intended for branch offices, the 2600 includes one or two ports of 10/100-Mbit/s Ethernet. Its lone module slot accommodates cards for options such as two more Ethernet ports or up to eight T1 ports.

In other words, it's not exactly a warp drive. But Cisco has a headlock on this market, deflecting competitors such as the Enterasys Networks Inc. (NYSE: ETS) X-Pedition 1800 and 2000, or Nortel Networks Corp.'s (NYSE/Toronto: NT) Passport 4400.

Cisco's 2003 share of the "midrange router" market -- which includes Cisco's 2600, 2500, 1700, and 1600 router families -- was 82 percent in terms of units, and 78 percent in terms of revenues, according to Neil Osipuk, an analyst following LAN switches for Infonetics Research Inc.

The 2600's longevity stems from "some combination of software, channel relations, and the integration with existing networks," Kamman says. Juniper would have to crack at least one of those areas to succeed against the 2600.

The NetScreen acquisition would help on the channel-relations front, but a bigger prize might be the integration of NetScreen's security into a 2600-like box. The market for secure midrange routers is relatively untapped, representing $167 million out of the total $1.4 billion market last year, according to Infonetics. Moreover, Nortel and Enterasys offer secure midrange routers, but Cisco doesn't (see Enterasys Intros Security Routers).

"Pepsi" is a nickname so apt, it's a wonder Juniper didn't use it years ago. For those who've been on Mars for the last few decades, the name refers to the Cola Wars, where Pepsico Inc. took on market leader Coca-Cola Co. (Then, there are those who prefer neither.)

— Craig "Dr Pepper" Matsumoto, Senior Editor, Light Reading

null0 12/5/2012 | 2:17:41 AM
re: Juniper: The Other Cola? Surely, you could of pointed us to the 2004 version of the callendar?

photon_tim 12/5/2012 | 2:17:39 AM
re: Juniper: The Other Cola? Can you still buy the Bay ARN/ASN? Way back when I did like them quite a bit.
They were quite stable at that time. And Cisco was just another CPE vendor.

What is the price nowadays?
photon_tim 12/5/2012 | 2:17:39 AM
re: Juniper: The Other Cola? So what is Huawei then? RC Cola.

Lokks like the use the same bottle as Coke (Cisco), but different prices ..
litemyfiber 12/5/2012 | 2:17:39 AM
re: Juniper: The Other Cola? BayRS ARN Router, PP2430 Router, Contivity 1700

C'mon guys get with the program! Anyone with any class would be ashamed to present LR's reporting!!!

Get a clue first before trying to represent the industry. Sheesh!
t_jones 12/5/2012 | 2:17:32 AM
re: Juniper: The Other Cola? The ARN is slow, stone-aged junk; the 2430 doesn't look much better and there are no performance numbers on Nortel's site to make it look better (other than "high performance" because of its 16MB of RAM and 50MHz processor); and the Contivity is meant as a VPN switch.

A clue-bat whack right back at you.
litemyfiber 12/5/2012 | 2:17:23 AM
re: Juniper: The Other Cola? You can order so many different options for an ARN its hard to put a firm price on it but its competetive with the 2600, and a better box anyday. Plus they have that great Site Manager GUI instead of being stuck with IOS, of course you can use CLI too if you're a masochist.
They halved the price for all BayRS boxes back around 1999, but that also killed the revenue stream internally at Nortel so the whole line kind of got sidelined development wise.
I've got customers who still order them by the dozens all the time for point of sale, F/R with ISDN dial-back into hub spoke with BCN/BLN at the core. Very stable as you said and BayRS has continued to release. They are up to ver 15.6 last I looked.
I believe ASN is also still available but not pushed as much.
The thing that really killed the line was when the Motorola 68000 series CPUs topped out at the 68060. The move to the power PC line forced a code respin and NT was not willing to invest in the line but all of the models are still quite viable.

What no one mentions is that the Cisco boxes have been frozen in time for about the same number of years and use the same Motorola CPUs. Performance in an branch office CPE router is not a challenge, it just has to crank away for years and years and the code has to be stable. BayRS is still viable, stable, and maintained. End of story!

mu-law 12/5/2012 | 2:17:16 AM
re: Juniper: The Other Cola? "Plus they have that great Site Manager GUI instead of being stuck with IOS"

Wow! Its another case of salesguy amnesia!

The historians among us (i.e. with more than 10 years of data experience) haven't so quickly forgot that SiteMangler was wellfleets undoing, and they couldn't sell their products to carriers until they broke down and created the "technician interface"... by then it was too late, IOS took over, and routers that run CLI have ruled the world since.

Its too bad, since they had the "VIP" idea first, did ospf better, etc, but I'm not going to overlook a crap EMS because of my romanticism about "what could have been". I don't think anyone else is either. If I were prone to do that, I would probably have a mac on my desk as well...

mboeing 12/5/2012 | 2:16:24 AM
re: Juniper: The Other Cola? "What no one mentions is that the Cisco boxes have been frozen in time for about the same number of years and use the same Motorola CPUs."

Which boxes? Cisco 2600? Well, at least the more recent models, such as 2691, employ a RISC CPU. Also some of the NM modules have own processors, thus taking load from the central CPU.

Wellfleet had nice boxes a few years ago but today they cannot compete with Cisco's low-end or mid-range routers anymore.
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