NEW YORK -- Juniper Networks Inc. (Nasdaq: JNPR) CEO Scott Kriens ended the Salomon Smith Barneytechnology conference on a high note this afternoon, giving investors a glimmer of hope in an otherwise gloomy environment.

During his keynote address, he explained how the current market shake-out will ultimately benefit companies such as Juniper, which he says has remained focused on its core products and customers.

During his talk, Kriens took a few shots at his competitors Cisco Systems Inc. (Nasdaq: CSCO) and Nortel Networks Corp. (NYSE/Toronto: NT), without actually naming them outright. He explained that these companies had tried to address the Internet service provider market using products designed to solve other problems. But now that the economy has dipped, companies like Juniper that built products specifically for IP and the carrier market will triumph. Why? Kriens said that these other companies have been forced to retreat to what they know best, their old markets. For Nortel that means the optical and telephony markets and for Cisco that means re-emphasizing its focus on enterprise networking.

Juniper's competitors, of course, may take issue with what Kriens had to say. Cisco said in an earlier presentation at the conference that it is still very much focused on service providers and is proud of the market share it won back last quarter from Juniper in the service provider core.

In fact, Cisco seems to be using its enterprise past to sell itself to carriers. "We know what their customers need," said Paul Nuti, senior vice president at Cisco, during his presentation. “And we can help them better understand those needs because we’ve already been working with enterprise customers.”

Kriens also noted that the timing of the downturn couldn’t have been better for Juniper.

"I’m glad I’m not starting up Juniper right now or trying to operate a $30 to $40 billion company in this market, because a lot of what is happening is outside of my control," he said. "We’re big enough to weather the storm, but still small enough that we aren’t at the mercy of the tides. We have ability to navigate through the squalls that come up along the way."

As for his assessment of the industry as a whole, Kriens thinks it is a great time to learn which companies are up to the task and which ones aren’t. "When you tighten the belt and survival is less obvious it doesn’t bring out the best in people or in companies," he said. "But it’s easier to find a good company these days than it was before. It’s difficult to find a good one when the tide is high, no rocks are showing." Some investors had expected Juniper to pre-announce bad news about the current quarter before Kriens' presentation today. But no such warning was given, and Kriens' somewhat upbeat tone help set minds at ease at the end of a week pervaded by economic gloom.

"This is the end note that everyone was looking for," said John Donachie, a senior vice president with Fleet Meehan.

"I think the fact that they didn’t pre-announce means that he might know something the rest of us don’t," said one fund manager after the presentation. "Everyone else has been so down around here and the whole industry looks so crappy, I was glad to hear a positive tone."

But Alex Henderson, the networking analyst for Salomon, cautioned that people should not try to read too much into Kriens’s comments.

"I think to read anything into these comments is a stretch," he said. "We asked him to come in and talk about the industry. From his perspective, the direction the industry is going looks favorable for Juniper. That’s why the presentation was the way it was."

During the four-day conference, the mood in the Sheraton Hotel in Midtown Manhattan was as somber. Sagging faces and questions of "When will carriers start spending again?" dominated almost every session.

Earlier in the day before Kriens' keynote, Pat Nettles chairman of Ciena Corp. (Nasdaq: CIEN) told investors that visibility from his carrier customers had not improved. His attempts to convince attendees that cuts in capital expenditure had hit legacy equipment providers more severely than his own company didn’t carry much weight in light of the company’s recent earnings call when the company lowered guidance.

"What is Nettles going to say?" said the fund manager. "He just told everyone a few weeks ago that his business was in the toilet."

Krien’s optimism may be having an affect on the company’s stock price. While the rest of the Nasdaq was crushed today, Juniper was up slightly 0.09 (0.71%) to $12.79. A far cry from it’s heyday, but a gain nonetheless.

— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com