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Optical/IP

Juniper's Kriens Gives Hope

NEW YORK -- Juniper Networks Inc. (Nasdaq: JNPR) CEO Scott Kriens ended the Salomon Smith Barney technology 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
hardcore router 12/4/2012 | 7:44:46 PM
re: Juniper's Kriens Gives Hope I remind everyone that their stock was at 244$ !!!
they lost 95% !!!
that put them in the area they should be.
no CEO can cover this with nice words.
but reasonable CEO's will not try.
this guy's credibility is also 95% lower than in his good days.
JERRY11 12/4/2012 | 7:50:41 PM
re: Juniper's Kriens Gives Hope
You know I expected you to post massages on this article, but surprisingly you didn't.
You, who had to say about Cisco, Avici and a lot about Cwnt although I presume you are not familiar with all the details about those companies. But about Juniper there is silence from you! I think this uncovers the mask out of your face and shows everyone your true face and your interests and maybe where you come from. This also explains why you donGÇÖt answer some questions posted on the testing board.
Pat Mudge 12/4/2012 | 7:51:40 PM
re: Juniper's Kriens Gives Hope I agree with your assessment of Don Scifres and Gordon Stitt. I would add Scott Kriens, Dan Smith and Pat Nettles to your list of exceptional CEOs. (Though Don and Pat are now chairmen.)

If I were to start a witch-hunt, I'd begin with the VCs and IBs who encouraged nascent companies to go pubic before they were ready. Next I'd expose the news organizations who pimped for them. Finally, I'd look at the corporations whose managers received pre-IPO shares in exchange for contracts or alpha/beta/pre-market deals.

Tom Wolfe, where are you when we need you?

Pat
fhe 12/4/2012 | 7:51:40 PM
re: Juniper's Kriens Gives Hope Besides bloviating and lining their own pocket during there service as CEOs, some of these guys also get paid a hefty amount after they were fired for screwing up a company. e.g. Rich McGinn (I guess that's how he got his name).

Worse yet, there are also some dot-com CEOs who will get paid for the rest of their lives, at hundreds of thousand dollars a year, for sending their company to the grave. Go figure...
Brattain 12/4/2012 | 7:51:40 PM
re: Juniper's Kriens Gives Hope sandiego,
you are dead on right about these criminals
called CEO's. Not only are many incompetent,
they are out there only to line
their own pockets. They invest ZERO of their
own money yet they are given the reins to
control a company and it's multi-billion dollars
invested by us stock holders. They go out
and spend extravagently, generate over-hype,
over expand the business, all in hopes of a
massive pay day (i.e., through their options).
And the key point here is they can do this because they have no downside risk - they
lose no personal money if it fails.
Who let's them operate this way?

I'm surprised the board of directors who
supposedly represent us stock holders haven't
received any criticism for the massive losses
in stock value.

And, ditto to an earlier post, "bloviate"
is the best word i've heard to describe what
a CEO does best.
sandiego 12/4/2012 | 7:51:41 PM
re: Juniper's Kriens Gives Hope Agree CEOs are key, but in the past few years a lot of over-puffed bureaucrats have been injected into those slots by VCs eager to burnish their boilerplate for the -- premature -- ipo. Jack Gifford of Maxim Integrated Products or, say, Wilf Corrigan of LSI, have proven their mettle, and I would feel pretty good about investing in their companies, but how often do you find them bloviating at the Plaza or St Regis???? Also, I really like that guy Shriffres of SDL: followed him around the OFC Conference in 1998 and he actually sat in and took notes in several tutorials! Too bad he didn't get his Stanford MBA --they wudda told him to hang out with the PR types. Jerry Fiddler of Wind River has what it takes in the CEO dept, too. Hell, there are lots of good CEOs: Bobby Johnson, Gordon Stitt, Jerry Sanders!!! but there are also a whole lot of empty suits. Do your own damn research.
pablo 12/4/2012 | 7:51:42 PM
re: Juniper's Kriens Gives Hope > ... CEOs .. are more clueless and disoriented
> than your average bench engineer or trade show
> slave ...

The advocate of the little man, I see.

Companies succeed based on *everybody* pulling their own weight in an organization. CEOs can help achieve this by motivating their team in a variety of ways.

No company can succeed with an incompetent CEO. Companies can succeed with a number of incompetent :test bench engineers" or "trade show slaves", though.

But I agree many CEOs are doing a pathetic job in dealing with today's issues. The 90's heyday CEOs' ability to cope with adversity in the market can only be given a failing grade at this point, with a few minor exceptions. And Scott Kriens is one of those, in my opinion.
Lighteating 12/4/2012 | 7:51:44 PM
re: Juniper's Kriens Gives Hope Great word!!
tsat 12/4/2012 | 7:51:44 PM
re: Juniper's Kriens Gives Hope Its the CEO's job to convince investors that
his company is doing great.... whether
that is or is not true.

-tsat
sandiego 12/4/2012 | 7:51:48 PM
re: Juniper's Kriens Gives Hope one of the few shards of myth still left standing from late 90s party is that CEOs are a BFD. They are more clueless and disoriented than your average bench engineer or trade show slave. Name one of these ubermensch who saw the tidal wave coming -- not Chambers, McNealy, Ellison, Gates, Groove, et, al. The only ones who pay attention to their utterings are Wall Streeters and the media. If they weren't such gluttons for attention they would have the good grace not to accept invitations to bloviate at these affairs and send their buttoned-down IR reps instead.
reoptic 12/4/2012 | 7:51:50 PM
re: Juniper's Kriens Gives Hope Down 96% from the peak...lost significant market share to Cisco...but the message was so uplifting!! More puffery from Light Reading...
kephill 12/4/2012 | 7:51:52 PM
re: Juniper's Kriens Gives Hope Who is he referring to? There are no $30/40 Billion Companies left. Can't believe this guy would slam Nortel - the best friend Juniper ever had.
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